Asian currencies likely to stay under pressure as new Fed regime keeps rates steady

[SINGAPORE] Asian currencies will likely remain under pressure from an elevated US dollar, as the US Federal Reserve kept interest rates steady on Wednesday (Jun 17).

The Fed kept rates unchanged at 3.5 to 3.75 per cent in the first Federal Open Market Committee meeting led by new Fed chair Kevin Warsh – who was known to be in favour of lower interest rates – as inflation remained above target.

The hawkish interpretation of the Fed decision will likely result in a stronger US dollar and higher rates in Asia, said Navin Saigal, head of global fixed income for Asia-Pacific at BlackRock.