Asian currencies fell across the board on Monday dragged by the US dollar rally after the Federal Reserve Chair over the weekend said expecting more rate hikes in the coming months is appropriate.
With a 0.8% decline, the South Korean won led the slide followed by the Taiwan dollar, Indian rupee and the Malaysian ringgit and the Philippine peso which dropped 0.6% to 0.4%. (See the chart below)
The Singapore dollar which had fallen 0.3% in overseas trading after late Friday's hawkish signals including the upward revision of Q1 GDP data and the comments by the Federal Reserve Chairperson Janet Yellen continued to drop on Monday and is down 0.25% as of 12:15 PM.
The United States revised its first quarter GDP data on Friday to a year-on-year growth rate of 0.8% from 0.5% flashed in the preliminary data last month. A couple of hours later, Yellen said additional rate hikes would be appropriate in the coming months.
"It's appropriate – and I have said this in the past, I think – for the Fed to gradually and cautiously increase our overnight interest rate over time," said Yellen, adding: "Probably in the coming months such a move would be appropriate."
With regard to the USD/SGD pair, a breakthrough Tuesday's high of 1.3840 next week will take the Singdollar to fresh 2-month low. The pair rose to 1.3831 on Monday from Friday's close of 1.3796.
The USD/KRW on Monday rose to 1,191 from Friday's close of 1,181 and the USD/TWD pair jumped to 32.735 from 32.535. The USD/INR moved to 67.30 from 66.96 while USD/MYR rose to 4.1120 from 4.0915.
The USD/PHP climbed up to 46.88 from 46.69 and the USD/CNY rose to 6.5820 from 6.5612, translating to a 0.3% decline in the yuan. The USD/IDR pair inched up to 13,648 from 13,631.