Asian currency markets decline, the dollar rebounds after Trump's speech, and risk sentiment eases.

Investing.com- Thursday, most Asian currencies fell, while the U.S. dollar rebounded after U.S. President Donald Trump hinted that the Middle East conflict could further escalate, prompting funds to flow back into safe-haven assets.

The U.S. Dollar Index rose 0.3% during the Asian trading session, rebounding from two straight days of declines. As of 23:39 U.S. Eastern Time (11:39 Beijing Time), U.S. dollar index futures also rose 0.3%.

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Trump’s remarks suggest the Iran conflict could further escalate

Trump said the United States will increase its military action against Iran over the next “two to three weeks,” but provided little clear information about prospects for a ceasefire.

The comments dampened optimism earlier this week that the conflict could quickly de-escalate, which had previously weighed on the dollar and supported regional currencies.

Oil prices rebounded again, worsening inflation risks and making expectations for monetary policy more cautious.

The won vs. U.S. dollar USD/KRW jumped 0.6%, while the yen vs. U.S. dollar USD/JPY rose 0.3%.

The onshore yuan USD/CNY edged up 0.2%, while the Singapore dollar vs. the U.S. dollar USD/SGD rose 0.3%.

The Indian rupee vs. U.S. dollar USD/INR currency pair was essentially flat at 93.24 rupees. The pair earlier this week touched a record high of 95.22 rupees.

The Reserve Bank of India this week stepped up its crackdown on foreign-exchange speculation, banning banks from offering rupee non-deliverable forward (NDF) contracts to both retail and non-resident clients, a key offshore tool often used to short the currency.

Australia’s February exports rebound

Despite trade data coming in stronger than expected, the Australian dollar vs. U.S. dollar AUD/USD currency pair still fell 0.5%.

According to data from the Australian Bureau of Statistics, the country’s February trade surplus surged significantly to A$5.69 billion, far above expectations, driven by export growth of 4.9% and a 3.2% decline in imports.

Investors are now looking ahead to the key U.S. labor-market data to be released on Friday, especially the nonfarm payrolls report, to gain further insight into the Federal Reserve’s policy outlook.

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