Asian currencies kept to a tight range, amid little relief from risk aversion prompted by the Middle East war

Most Asian currencies kept to a tight range on Tuesday as a resurgence in oil prices, on continued hostilities in the U.S.-Israel war on Iran, kept risk appetite largely on edge.

The Australian dollar rose slightly, outpacing peers as markets positioned for a likely interest rate hike by the Reserve Bank of Australia later in the day.

The Australian dollar’s AUD/USD pair gained 0.2%, faring somewhat better than its peers.

Focus was squarely on the conclusion of a RBA meeting later in the day, with the central bank widely expected to hike interest rates by 25 basis points to 4.10%.

Bets on a hike were fuelled by a series of hawkish messages from the RBA in recent weeks, as the central bank grapples with a late-2025 resurgence in inflation.

The yen’s USD/JPY pair added 0.2%, but traded well below a near 19-month high hit last week.

Broader Asian currencies kept to a tight range on Tuesday, amid little relief from risk aversion prompted by the Middle East war.

The yuan’s USD/CNY pair dropped 0.2%, faring better than its peers on a stronger midpoint fix from the People’s Bank.

The Singapore dollar’s USD/SGD pair added 0.1% after data showed the country’s key non-oil exports grew less than expected in February.

The won’s USD/KRW advanced 0.2%, while the Taiwan dollar’s USD/TWD pair declined 0.2%.

The Indian rupee’s USD/INR pair added 0.1% to 92.321 rupees, but remained below recent record highs amid signs of currency market intervention by the Reserve Bank of India.

The rupee, along with most Asian currencies, were battered by a spike in oil prices, which markets feared would unsettle economy of countries. Most Asian countries are net importers of oil and are highly vulnerable to supply disruptions in the Middle East.

The war showed few signs of cooling, with Iran largely keeping the Strait of Hormuz blocked in retaliation for attacks by U.S. and Israel. Iran also launched strikes against Israel and U.S. in several Middle Eastern countries.