Asian currencies fall on trade uncertainty and U.S. slowdown
Press Hub UCapital
Share:
Emerging Asian currencies declined on Monday, struggling to capitalize on a weaker U.S. dollar (DXY), which remained near a four-month low at 103.85 amid concerns over trade tensions and a potential slowdown in the U.S. labor market. The Indonesian rupiah (USDIDR) fell 0.34%, while the Malaysian ringgit (USDMYR) and Thai baht (USDTHB) also edged lower. The Philippine peso (USDPHP) was the exception, rising 0.18% as the country’s stock market outperformed.
The uncertainty stems from U.S. tariff policies, with President Trump refraining from forecasting a recession while maintaining a volatile stance on trade measures. The U.S. recently suspended its 25% tariffs on most Canadian and Mexican goods until April 2, marking the second rollback in two months. However, threats of a global reciprocal tariff regime from April 2 have left markets on edge.
Asian equities reflected the mixed sentiment. The Philippine Stock Exchange Index (PSEI) surged to its highest since January 24, buoyed by cooling inflation. However, Chinese stocks (000001) fell 0.2%, pressured by a weaker-than-expected consumer price index (CPI), which dropped at the sharpest pace in 13 months, while producer price deflation persisted. Thailand’s SET Index declined 1%, despite government plans to stimulate 3% annual GDP growth.
Emerging market currencies have posted mixed performances in 2025. Singapore’s dollar (USDSGD) and Thailand’s baht (USDTHB) have been the biggest gainers YTD, rising 2.6% and 1.6%, respectively. In contrast, India’s rupee (USDINR) and Indonesia’s rupiah (USDIDR) have been the worst performers, down 1.9% and 1.6% YTD.
With a crucial U.S. trade probe set to conclude by April 1, FX markets remain on edge. Traders will also watch for U.S. inflation data on Wednesday, which could dictate Federal Reserve policy and shape risk sentiment for Asian assets in the coming weeks.
The uncertainty stems from U.S. tariff policies, with President Trump refraining from forecasting a recession while maintaining a volatile stance on trade measures. The U.S. recently suspended its 25% tariffs on most Canadian and Mexican goods until April 2, marking the second rollback in two months. However, threats of a global reciprocal tariff regime from April 2 have left markets on edge.
Asian equities reflected the mixed sentiment. The Philippine Stock Exchange Index (PSEI) surged to its highest since January 24, buoyed by cooling inflation. However, Chinese stocks (000001) fell 0.2%, pressured by a weaker-than-expected consumer price index (CPI), which dropped at the sharpest pace in 13 months, while producer price deflation persisted. Thailand’s SET Index declined 1%, despite government plans to stimulate 3% annual GDP growth.
Emerging market currencies have posted mixed performances in 2025. Singapore’s dollar (USDSGD) and Thailand’s baht (USDTHB) have been the biggest gainers YTD, rising 2.6% and 1.6%, respectively. In contrast, India’s rupee (USDINR) and Indonesia’s rupiah (USDIDR) have been the worst performers, down 1.9% and 1.6% YTD.
With a crucial U.S. trade probe set to conclude by April 1, FX markets remain on edge. Traders will also watch for U.S. inflation data on Wednesday, which could dictate Federal Reserve policy and shape risk sentiment for Asian assets in the coming weeks.