Asian Currencies Slip as Powell Dashes Hopes for Rate Cuts

Asian currencies fell on Thursday after Federal Reserve Chair Jerome Powell signaled that interest rate cuts are unlikely in the near term, despite growing concerns over global trade tensions. Meanwhile, the Bank of Korea held its key rate steady, as expected.

In prepared remarks, Powell emphasized the Fed’s commitment to keeping long-term inflation expectations anchored, stating that temporary price increases should not evolve into lasting inflation. The central bank’s careful stance reflects rising uncertainty linked to new tariffs, which could both slow economic growth and push up consumer prices.

The U.S. dollar strengthened slightly in Asian trading, with the Dollar Index gaining 0.2%. However, it remained close to its three-year low reached last week.

Among regional currencies, Japan’s yen weakened 0.5% against the dollar. March export data showed growth for the sixth month in a row, as businesses rushed shipments ahead of potential new tariffs. The Singapore dollar and Chinese yuan each edged 0.2% lower, while the Thai baht slipped 0.7%.

Australia’s dollar dropped 0.5% despite strong employment figures, which showed job growth rebounding alongside a marginal uptick in unemployment.

South Korea’s won also declined by 0.4% after the central bank left interest rates unchanged at 2.75%. However, it hinted at a possible cut as early as May, citing economic risks tied to U.S. trade policy.

Traders remained cautious amid unpredictable signals from Washington, as President Trump claimed progress in trade talks with Japan. Meanwhile, China expressed willingness to negotiate, but demanded greater respect from the U.S. administration.