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DBS economists Radhika Rao and Mo Ji expect the Bank of Korea (BoK) to raise its base rate to 2.75% from 2.50% in July, citing persistent CPI inflation above 3% and resilient growth. They highlight robust exports and investment linked to the AI (Artificial intelligence) boom and note that Korean Won weakness and portfolio outflows further justify tighter monetary policy.Korean policy tightening backed by data”The Bank of Korea is expected to raise the base rate to 2.75% from 2.50% in July.””The BoK signaled in June that it remains prepared to tighten monetary policy despite the recent decline in oil prices…

MUFG’s Lloyd Chan highlights the Indonesian rupiah’s continued vulnerability as USD/IDR moved back above 18,000 amid renewed Middle East tensions and elevated US yields. Although attractive government bond and SRBI yields have supported foreign inflows into the bond market, persistent net foreign equity outflows leave the balance of risks tilted toward further rupiah weakness.External pressures weigh on Rupiah”We remain cautious on selective regional currencies, particularly the Indonesian rupiah.””IDR led regional losses yesterday, with USDIDR rising 0.5% to move back above the 18,000 level.””Renewed geopolitical tensions in the Middle East and elevated US yields continue to exert external pressure on the…

Gold (XAU/USD) price retreats on Friday during the North American session, pressured by US President Donald Trump’s comments allowing the resumption of US-Iran talks, but reiterating that the ceasefire is “over.” The XAU/USD pair trades at around $4,103, down 0.48%.XAU/USD falls as renewed war risks lift yields and DollarThe yellow metal seems poised to end the week down 0.51%, driven by the escalation of the conflict. The Greenback erased its earlier losses, as the US Dollar Index (DXY), which measures the buck’s value against six currencies, holds firm at 100.94, unchanged.In his Truth Social account, President Trump posted, “The Islamic…

MUFG’s Lloyd Chan notes Bank Negara Malaysia (BNM) kept the Overnight Policy Rate (OPR) at 2.75% and expects it to stay on hold through 2026, with domestic fundamentals described as broadly supportive. Recent Malaysian Ringgit (MYR) weakness has stayed below 4.15 against the US Dollar (USD), and Chan expects USD/MYR to trade broadly within a 4.00–4.20 range near term, while maintaining a neutral stance on Malaysian government securities.Ringgit seen holding broad range”In Malaysia, BNM kept the Overnight Policy Rate unchanged at 2.75% and maintained a broadly neutral policy stance.””We expect BNM to remain on hold through the rest of 2026,…

Commerzbank analysts highlight that China’s June Consumer Price Index (CPI) slowed to 1.0% year-on-year while Producer Price Index (PPI) rose 4.1%, widening the PPI-CPI gap and squeezing downstream margins. The PBoC acknowledged “structural divergence” between high-tech strength and weak consumption. Despite this backdrop, USD/CNY and USD/CNH both fell, reflecting some currency strength even as domestic demand remains subdued.China reflation momentum softens”China’s reflationary recovery lost further traction in June, with CPI rising 1.0% yoy (Bloomberg consensus: 1.1%) vs 1.2% in both April and May. The reading marks the slowest CPI print in three months and reinforces concerns that domestic demand remains…

MUMBAI: India’s foreign exchange reserves appear to be showing early signs that targeted central bank measures to attract overseas capital might be gaining some traction, although experts believe a more accurate assessment of the programs will be possible only later – perhaps in September.The country’s stockpile of assets denominated in foreign currencies rose $7.26 billion to $674 billion in the week ended July 3, the latest data from the Reserve Bank of India (RBI) showed.Of the total reserves, foreign currency assets increased $4.5 billion to $545.5 billion, while gold reserves increased $2.6 billion to $105.2 billion during the week.This suggests…

The US Dollar Index (DXY) trades within a volatile range on Friday as a sparse US economic calendar leaves traders watching developments in the Middle East after renewed hostilities between the United States (US) and Iran this week. Even so, the latest flare-up has provided only limited support, with the DXY set to finish the week virtually unchanged.At the time of writing, the index, which tracks the Greenback’s value against a basket of six major currencies, is trading around 100.85 after slipping to a one-week low of 100.60 earlier in the Asian session.On Friday, US President Donald Trump said in…

UOB’s Quek Ser Leang notes USD/SGD remains range-bound, with intraday action expected between 1.2905 and 1.2940 as recent price moves provided no fresh directional clues. Over the next one to three weeks, the bank sees mild downward pressure as having eased, projecting a broader 1.2890–1.2990 range. On a one to three month horizon, a break above 1.3000 could target 1.3095.Dollar seen consolidating in ranges”24-HOUR VIEW: We noted “a slight increase in upward momentum,” but we pointed out that “it is insufficient to indicate a continued rise in USD.” We indicated that USD “is more likely to trade in a higher…

India’s forex reserves jumped $7.26 billion to $674.193 billion during the week ended July 3, the Reserve Bank of India said on Friday.In the previous reporting week, the forex kitty had dropped by $5.654 billion to $666.933 billion.The kitty had expanded to an all-time high of $728.494 billion during the week ended February 27 this year before the onset of the Middle East conflict, which led to several weeks of a drop as the rupee came under pressure and the RBI had to intervene in the forex market through dollar sales.Prime Minister Narendra Modi has also made multiple public appeals…

TD Macro Research expects the Canadian labour market to soften in June, with employment unchanged versus market expectations for a 10k gain after May’s 87.8k surge. They see the unemployment rate steady at 6.6% and wage growth for permanent workers rising modestly to 3.6% year-on-year, only partly reversing May’s sharp deceleration.Jobs surge seen mean-reverting”We look for the Canadian labour market to return to a softer footing in June with employment forecast to remain unchanged (market: +10k) after the creation of 87.8k jobs last month as the unemployment rate holds at 6.6% with a stable participation rate.””Monthly business surveys have been…