Asian Currencies Decline as Dollar Surges Following SNB Rate Cut
Asian Currencies Under Pressure from Dollar Rebound
Most Asian currencies experienced a sharp decline on Friday due to the rebound of the dollar after an unexpected interest rate cut by the Swiss National Bank. This move pushed currency traders towards the greenback.
Dollar Strengthens to Three-Week High in Asian Trade
The dollar surged to a three-week high in Asian trade, extending its rebound from Thursday, despite signals on interest rate cuts from the Federal Reserve. The dollar index saw outsized gains, indicating a surge in demand for the greenback.
SNB Cut Impacts Dollar’s Performance
The dollar indicators rose notably after the SNB cut interest rates unexpectedly, making it the first major central bank to do so post the COVID-19 pandemic. This left the dollar as a low-risk, high-yielding currency in the short term.
USDCNY Weakens as PBOC Intervenes
The Chinese yuan faced significant losses due to a stronger dollar, with the People’s Bank of China potentially planning more interest rate cuts. The USD/CNY pair crossed the 7.2 level for the first time since November 2023, prompting intervention from the PBOC.
USDJPY Reverses Post-BOJ Fall
The Japanese yen remained flat on Friday, recovering from steep losses after the Bank of Japan’s interest rate hike earlier in the week. The USD/JPY pair hovered near its highest level in four months, supported by positive economic data for February.
Broader Asian Currencies Experience Decline
Other Asian currencies also faced losses, with the Australian dollar sliding, the South Korean won surging, the Singapore dollar rising, and the Indian rupee moving closer to record-high territory against the dollar.
