The weakening of the US dollar has driven up major Asian currencies. These key levels are worth paying attention to

According to the VESYNC11 financial APP, with the weakening of the US dollar, major Asian currencies have recently seen some gains, drawing investors' attention to key levels of these Asian currencies. Data shows that the Bloomberg Asia Dollar Index, which measures the strength of Asian currencies, is approaching a one-year high, while the US Dollar Index (DXY) is currently hovering around 102.

Due to concerns about global economic uncertainty, the US Dollar Index has been fluctuating downwards since May this year, with weak economic data accelerating the decline. Some market participants point out that the Federal Reserve is still maintaining a high interest rate environment, leading to continued accumulation of risks in the US economy; the inhibitory effect of the high interest rate environment on the US economy is becoming more severe, with a widening impact, and market concerns about the outlook for the US economy are escalating. The trend of the US Dollar Index is to some extent a reflection of the deteriorating macroeconomic fundamentals in the United States.

Currently, investors are awaiting the Jackson Hole Global Central Bank Symposium to be held later this week, hoping to solidify expectations of a rate cut by the Federal Reserve this year from Fed Chair Powell's speech. In addition, the speech by Bank of Japan Governor Kuroda in the Japanese parliament on Friday is also closely watched, as any hints of further rate hikes by the Bank of Japan could not only boost the yen but also provide support to other currencies in the Asian region.

Here are the key levels of major Asian currencies that investors are focusing on:

1. Japanese Yen

The USD/JPY exchange rate has been consolidating between 141.7 (August low) and 149.39. Whichever level is breached first could pave the way for the long-term trend in that direction. Despite a rebound in the yen following the Bank of Japan's unexpected rate hike last month from its lowest level since 1986, the yen has still fallen 4% against the US dollar so far this year, underperforming other major Asian currencies.

2. Chinese Yuan

In early August, the offshore yuan against the US dollar briefly surged to a 14-month high, with a decline of about 0.2% so far this year. Investors will be watching whether the USD/CNH exchange rate can break through the range of 7.0838-7.1945.

3. Indonesian Rupiah

USD/IDR

The USD/IDR exchange rate is preparing to test last November's low of 15,360. However, at least from a momentum indicator perspective, the currency pair is already in oversold territory. If the downward momentum weakens, the USD/IDR exchange rate may rebound to the January 26 high of 15,843. Data shows that the Indonesian Rupiah has risen by nearly 5% this month, approaching to erase the decline since the beginning of last year.

4. MYR

According to the momentum indicator, the USD/MYR is already in oversold territory. If the bearish momentum subsides, the USD/MYR exchange rate may rebound to the high of 4.5317 in March last year. However, if the US dollar weakens further, the next support level for the USD/MYR will be the low of 4.2250 in February last year. Data shows that the Malaysian Ringgit has risen by nearly 5% against the US dollar this year, outperforming other Asian currencies.

5. THB

The USD/THB exchange rate is currently targeting last December's low of 34.099. However, if the US dollar weakens and the downward momentum subsides, the USD/THB exchange rate may rebound to the January high of 35.885. Data shows that in July and August this year, the Thai Baht has risen by over 3% against the US dollar, approaching to erase the decline since the beginning of last year