Oil prices rebounded again, reinforcing inflation risks and a cautious monetary policy outlook

Most Asian currencies dropped on Thursday, prompting a shift back toward safe-haven assets.

The won’s USD/KRW pair climbed 0.6%, while the yen’s USD/JPY advanced 0.3%.

The yuan’s onshore pair USD/CNY edged 0.2% higher, while the Singapore dollar’s USD/SGD added 0.3%.

The Indian rupee’s USD/INR pair was largely muted at 93.24 rupees. The pair had hit a record high of 95.22 rupees at the start of the week.

The Reserve Bank of India this week intensified its crackdown on forex speculation by barring banks from offering rupee non-deliverable forward (NDF) contracts to both resident and non-resident clients, a key offshore instrument often used to bet against the currency.

The Australian dollar’s AUD/USD pair dropped 0.5% despite stronger-than-expected trade data.

Figures from the Australian Bureau of Statistics showed the country’s trade surplus widened sharply to A$5.69 billion (US$3.91 billion) in February, well above forecasts, as exports rose 4.9% and imports declined 3.2%.

Meanwhile, The US Dollar Index rose 0.3% in Asian trade, recovering from two days of losses. US Dollar Index Futures also traded 0.3% higher as 03:39 GMT.

U.S. President Trump said the country would ramp up military operations against Iran over the next “two to three weeks,” offering little clarity on the prospects for a ceasefire.

The remarks dampened earlier optimism that the war could de-escalate soon, which had weighed on the dollar and supported currencies earlier in the week.

Oil prices rebounded again, reinforcing inflation risks and a cautious monetary policy outlook.

Investors are now turning to U.S. labour market data due on Friday, particularly the nonfarm payrolls report, for further cues on the central bank’s policy outlook.