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>>Asian currencies remain muted as the dollar retreats amid a shocking congressional investigation into Fed Chair Powell

Asian currencies remain muted as the dollar retreats amid a shocking congressional investigation into Fed Chair Powell

crypthub

about 11 hours ago

Market Reaction

The US dollar index fell about 0.4% after a congressional probe into Fed Chair Jerome Powell was announced. Asian currencies – yen, yuan, won and Singapore dollar – showed only marginal gains, trading in tight bands. Traders favoured capital preservation, dampening any rally despite the weaker dollar.

Central Bank Caution

Regional central banks are adopting a wait‑and‑see approach, delaying policy tweaks until external conditions stabilise. The probe injects uncertainty about future US rate moves, influencing decisions from Tokyo to Sydney. This cautious stance contributes to the muted forex activity across the Asia‑Pacific.

Probe Details and Perception

Congress will examine the Fed’s policy communication, inflation forecasts and balance‑sheet reductions over the past 18 months. Lawmakers seek clarity on recent pauses in rate hikes and internal disagreements. Market participants view the investigation as a political risk that could erode the dollar’s safe‑haven appeal.

Outlook for Traders

Strategists advise focusing on volatility management and diversifying into commodities or currencies of apolitical central banks. Options pricing reflects higher expected swings for major dollar pairs. Upcoming Fed testimonies and Asian central‑bank statements will shape short‑term positioning.