Dollar Rises as Asian Currencies Trade Mixed Amid Intervention Risks

The US dollar strengthened moderately on Tuesday as Asian currencies traded mixed and the Japanese yen weakened further due to intervention risks. The USD/JPY pair rose 0.2% to 157.69, leaving the yen near recent lows after its post-BOJ weakening.

According to DBS FX & Credit Strategist Chang Wei Liang, the yen remains significantly undervalued despite earlier joint US-Japan interventions and the BOJ's 25-basis-point rate hike in September. The country has accumulated around $1 trillion in foreign-exchange reserves, giving authorities substantial resources to support the currency.

Oil prices remain a major variable for import-dependent currencies such as the Indian rupee, with oil hovering around $100 a barrel ahead of potential US-Iran talks at the United Nations General Assembly this week. The USD/INR pair was around 95.80, little changed, while India's measures to strengthen its balance of payments have raised $143.6 billion.

Meanwhile, the Australian and New Zealand dollars were in focus as markets awaited Reserve Bank of Australia Governor Michele Bullock's fireside chat later Tuesday. Markets are pricing about a 90% probability of a rate hike next week, which would be the fourth increase this year.