Most Asian currencies traded little changed against the dollar on Monday, with the U.S. Dollar Index (DXY) holding around 98.83 at 01:44 GMT, near its lowest level since mid-May. The dollar fell nearly 1% in the prior week, reflecting broader softness in the greenback.
The U.S. Treasury said it would at least double the volume of long-term bond repurchases to $4 billion per operation, a move aimed at improving liquidity and easing pressure on long-term yields. The announcement comes as U.S. federal debt surpassed $40 trillion and the federal deficit approaches $1.8 trillion, underscoring the government’s heavy financing needs amid elevated interest costs.
Trade tensions between the U.S. and Canada escalated after Washington imposed 50% tariffs on $20 billion worth of Canadian goods following the collapse of bilateral trade negotiations. Ottawa responded with equivalent retaliatory tariffs, effective September 8, further straining cross-border commerce.
Against this backdrop, currency movements were mixed. The USD/JPY pair edged down 0.1%, trading below 159 yen, while the USD/CAD rose 0.2%. The USD/CNY and USD/INR held steady, with gains of 0.03% and 0.02%, respectively. The USD/KRW fell 0.3%, and the USD/SGD showed little variation. The AUD/USD slipped 0.1%.
Oil prices retreated more than $1 per barrel ahead of potential sanctions-related supply disruptions, with markets monitoring developments around Iranian oil exports and the Strait of Hormuz. Investors also awaited corporate earnings from Nvidia and remarks from Federal Reserve officials, including Kevin Warsh, scheduled to speak at the Jackson Hole symposium.
Bank of Japan Deputy Governor Ryozo Himino’s recent comments and the U.S. Treasury’s bond-buyback strategy are being closely watched for signals on monetary policy and fiscal management amid shifting global trade dynamics.
