Asian Currencies Hold Steady Ahead of Fed Speech

Asian currencies traded mostly in a narrow range on Friday as investors held back from making major bets before Federal Reserve Chair Kevin Warsh's speech. The cautious mood kept most regional currencies under pressure, except for the South Korean won, which hit a 13-month high after the Bank of Korea raised its benchmark interest rate by 25 basis points to 3%.

The USD/KRW pair fell about 0.3% to 1,377 won, marking the lowest level for the pair since July 2025. The Bank of Korea also became more optimistic about the country's economy, sharply raising its 2026 growth forecast to 3.3% from 2.6%. Strong exports and rising demand for semiconductors linked to the artificial intelligence boom were among the reasons behind the stronger outlook.

The focus is now shifting to Warsh's speech at the Jackson Hole symposium, with investors wanting to know whether the Federal Reserve could raise interest rates again and how officials view the recent inflation data. Markets were pricing in around a 35% chance of a Fed rate hike in September, while the probability of a rate increase by December had climbed to about 75%, according to CME FedWatch.