Can foreign applicants qualify for micro entity status?

Yes, foreign applicants can qualify for micro entity status if they meet all the requirements. The USPTO states in MPEP 509.04(a):

Small entities may claim reduced fees regardless of the country in which they are located. There is no restriction requiring that the person, small business concern, or nonprofit organization be located in the United States.

For applicants with income in foreign currency, 37 CFR 1.29(c) specifies: ‘If an applicant’s, inventor’s, joint inventor’s, or entity’s gross income in the preceding calendar year is not in United States dollars, the average currency exchange rate, as reported by the Internal Revenue Service, during that calendar year shall be used to determine whether the applicant’s, inventor’s, joint inventor’s, or entity’s gross income exceeds the threshold specified in paragraph (a)(3) or (4) of this section.’