Asian Currencies Weaken Amid Fed Rate-Hike Expectations

Asian currencies mostly weaken against the dollar due to expectations of US Fed rate hikes, which enhance the appeal of dollar-denominated fixed-income assets. US inflation prints were in line with expectations but hot enough to strengthen rate hike expectations. The Fed funds futures raised the probability of a 25bps hike to 88%, up from 62% last Monday. The US dollar rises 0.3% against the won and yen, while the Australian dollar falls 0.2% to $0.7151.