Asian Currencies Steady as Markets Await US Inflation Data

Asian currencies consolidated against the U.S. dollar on August 12, 2026, as global financial markets awaited the release of U.S. Consumer Price Index (CPI) data. Investors are seeking signals to predict the Federal Reserve System's interest rate trajectory for its September 16 meeting, with traders currently divided between a quarter-point increase and maintaining current rates.

MUFG Bank reported that the Federal Open Market Committee has shifted its primary focus toward inflation data over labor market indicators, a sentiment echoed by Chicago Fed President Austan Dean Goolsbee, who stated the bank is more concerned about high inflation than labor market weakness. In Asian trade, the U.S. dollar traded 0.2% higher at 1,413.43 won and remained largely unchanged at 159.31 yen, while the Australian dollar held flat at US$0.7063. The Japanese yen reached its softest levels of the month despite joint interventions by U.S. and Japanese authorities.

Market volatility was further influenced by geopolitical tensions in the Middle East. Brent crude oil prices rose to $89.69 a barrel following an attack by Iran-backed Houthis on a cargo ship in the Bab el-Mandeb strait and a U.S. military strike on a container ship off Pakistan intended to break a blockade of the Strait of Hormuz.