Most Asian currencies edged lower on Tuesday as the U.S. dollar strengthened ahead of the Federal Reserve’s interest rate decision, while investors also awaited the Bank of Japan’s policy meeting set to begin later in the day.

The U.S. Dollar Index rose 0.2% to 103.59 in Asian trading as of 07:27 Moscow time, remaining slightly above the five-month low reached last week.

U.S. Dollar Index futures also climbed 0.2%.

Investors Await Fed Decision Amid Trump’s Tariff Concerns

Market participants are eagerly anticipating the Federal Reserve’s meeting beginning Tuesday, where interest rates are widely expected to remain unchanged.

Investors will closely analyze Fed commentary for clarity regarding recent trade policy developments, including tariffs introduced by the Trump administration, which have heightened concerns over a possible recession.

Trump’s tariffs have placed pressure on emerging Asian economies, weakening export demand, disrupting supply chains, and pushing investors toward safer assets.

The Indonesian rupiah led losses, with USD/IDR jumping 0.6%. This decline occurred despite a Reuters poll suggesting that Bank Indonesia will likely keep interest rates steady on Wednesday to protect the rupiah amid rising global trade tensions.

Elsewhere, the South Korean won (USD/KRW) weakened by 0.3%, while the Singapore dollar (USD/SGD) declined by 0.2%.

Chinese yuan pairs (USD/CNY onshore and USD/CNH offshore) remained largely unchanged.

On Sunday, China unveiled a comprehensive “special action plan” aimed at boosting domestic consumption and revitalizing economic growth amid recent challenges.

Meanwhile, the Australian dollar (AUD/USD) fell by 0.2%, and the Indian rupee (USD/INR) weakened by 0.1%.