Asian Currencies Hold Steady as Investors Await Powell’s Speech

Asian currencies and the U.S. dollar traded in tight ranges on Tuesday as investors awaited Federal Reserve Chair Jerome Powell’s comments, following last week’s rate cut. The U.S. Dollar Index was steady after slipping in the prior session, with markets cautious over the Fed’s future policy path.

The Federal Reserve cut interest rates by 25 basis points to 4.00–4.25%, its first reduction since December. Updated dot-plot projections showed policymakers leaning toward two additional cuts this year. However, Fed Governor Stephen Miran, who advocated for a larger 50 bps cut, warned Monday that policy remains restrictive and highlighted risks to the labor market.

Powell’s speech later Tuesday, along with upcoming remarks from other Fed officials, will be closely scrutinized for signals on whether more cuts are likely. Analysts at ING noted that investors want clarity on whether Powell’s cautious tone reflects the broader FOMC stance. Traders are also watching Friday’s U.S. core PCE inflation data, expected to rise 0.2% month-on-month, which could reinforce forecasts for further easing.

Across Asia, currencies moved little amid a light regional calendar. The Japanese yen was flat against the dollar, while the Singapore dollar edged 0.1% higher. The South Korean won gained 0.3%, and the Indian rupee added 0.2%. The Australian dollar slipped 0.2% after a private survey showed slowing business activity, pressured by U.S. tariffs and weaker orders. Meanwhile, China’s onshore and offshore yuan held steady after the central bank left key lending rates unchanged near record lows.

With Powell’s speech and U.S. inflation data ahead, traders remain cautious, balancing Fed signals with regional economic trends.