Asian currencies traded in narrow ranges on Friday as geopolitical tensions in the Middle East eased, calming recent volatility sparked by conflict fears. The Taiwan dollar stood out, hitting a three-year high amid broad dollar weakness.
With markets awaiting U.S. PCE inflation data and a July trade tariff deadline set by Donald Trump, traders turned more cautious. The Japanese yen and Australian dollar held steady, while the South Korean won gained 0.2%.
The U.S. dollar hovered near its lowest level in three years, weighed down by growing concerns over Federal Reserve independence following repeated calls from Trump for rate cuts.
Investors are closely watching the upcoming PCE figures for signals on the Fed’s policy path. Meanwhile, uncertainty over upcoming U.S. trade measures is also tempering risk appetite, keeping forex markets largely in consolidation mode.