Asian currencies were little changed on Monday, while the U.S. dollar slipped after the U.S. government opened a criminal investigation involving Federal Reserve Chair Jerome Powell, raising doubts about the central bank’s independence.
The US Dollar Index, which measures the greenback against a basket of major currencies, fell 0.2% from a one-month high.
US Dollar Index Futures also traded 0.2% lower as of 04:27 GMT.
Track top performers among Asian currencies with InvestingPro subscription Fed’s Powell faces indictment threat Investor sentiment was shaken after Powell said the administration had threatened the Federal Reserve with a potential criminal indictment linked to his Senate testimony on cost overruns related to renovations at the Fed’s headquarters.
The development undermined confidence in U.S. institutions and encouraged a defensive tone across global markets, limiting risk appetite in Asia.
Against that backdrop, most regional currencies were muted.
The Japanese yen’s USD/JPY pair ticked up 0.2%, while the Singapore dollar’s USD/SGD traded flat.
The South Korean won’s USD/KRW pair was a notable outlier, jumping 0.7% on Monday.
In China, the yuan’s onshore pair USD/CNY was little changed, while the offshore pair USD/CNH ticked 0.1% lower.
The Indian rupee’s USD/INR pair was largely unchanged.
The Australian dollar’s AUD/USD pair ticked 0.2% higher.
US payrolls data support Fed cut bets Investor mood was also influenced by U.S. economic data released on Friday, which showed nonfarm payrolls growth slowed more than expected in December.
The softer hiring figures added to expectations that the Federal Reserve could deliver interest rate cuts later this year.
Markets are now pricing in at least one additional Fed rate cut in 2026, with some traders expecting two reductions.
Investors now await the U.S. consumer price index for December, due on Tuesday, one of the major economic readings ahead of the Federal Reserve’s next policy meeting later this month.
