Asian currencies traded largely flat on Tuesday, as markets balanced geopolitical uncertainty surrounding possible Russia-Ukraine peace negotiations with anticipation ahead of the Federal Reserve’s annual Jackson Hole symposium.
The U.S. Dollar Index — which tracks the greenback against a basket of major peers — was little changed in Asian trading hours after modest gains on Monday. Dollar Index futures were also steady as of 04:35 GMT.
Geopolitics: Investors Await Clarity on Peace Talks
Traders refrained from making bold moves following high-level discussions in Washington between U.S. President Donald Trump, Ukrainian President Volodymyr Zelenskyy, and European leaders. The talks aimed to pave the way for direct negotiations with Russian President Vladimir Putin.
Although officials described the meeting as “good and constructive,” no concrete outcomes were announced. The lack of progress, coupled with last week’s failed Alaska summit, has kept investors cautious.
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The Japanese yen (USD/JPY) slipped 0.1%.
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The Chinese yuan — both onshore (USD/CNY) and offshore (USD/CNH) — traded flat.
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The Singapore dollar (USD/SGD) edged 0.1% lower.
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The Indian rupee (USD/INR), South Korean won (USD/KRW), and Australian dollar (AUD/USD) all held steady.
Focus Turns to Powell at Jackson Hole
Attention is now on the Federal Reserve’s Jackson Hole symposium later this week, where Chair Jerome Powell is expected to give a pivotal policy update on Friday.
Analysts at ING noted it may be too soon for Powell to signal a September rate cut outright, but any shift in labor market data could force the Fed to acknowledge easing conditions.
Markets currently see a 25-basis-point cut in September as the most likely outcome, following stronger-than-expected U.S. producer and import price data last week. That inflation uptick has reduced the probability of a larger 50-basis-point move.
