Asian FX heads for monthly losses as rising US yields sap appeal

BENGALURU: Most Asian currencies were subdued on Wednesday and poised for monthly losses as high US yields, a firm dollar and expectations that the Federal Reserve will keep rates higher for longer weighed on sentiment, while regional stock markets traded mixed.

Among the weakest were currencies of oil-importing economies with current account deficits, with the Indian rupee, Indonesia’s rupiah and the Philippine peso down 0.8 percent, 0.9 percent and 0.4 percent, respectively, over the month.

MSCI’s broader global EM currencies index touched a record high earlier this month before giving up most of those gains by month-end, as simmering US-Iran tensions, higher oil prices and a global bond selloff rattled investor sentiment.

The Thai baht and the Malaysian ringgit retreated more than 1.3 percent each in September, while the South Korean won was the only one to advance.

The rupiah rose 0.6 percent to 17,845 per dollar after breaching the key 18,000 level on Tuesday. However, it remained on track for its worst month since May and was the region’s worst-performing currency this year.

Stocks in Kuala Lumpur rose 0.6 percent, while Jakarta’s benchmark index rebounded 0.2 percent. Thai shares slid as much as 2 percent and were on course for their steepest one-day drop since June.

Indonesian stocks were on track for their worst month since June after falling more than 6 percent, while Malaysian shares were set for their steepest monthly decline since January 2025.

Singapore was headed for its first monthly loss in six months and Thailand was on course for its weakest month since March.