Asian currencies mostly firm as US dollar retreats on tariff proposals
SINGAPORE, March 5 — Most emerging currencies firmed today as US dollar weakness persisted due to fears that US President Donald Trump could start a trade war if he goes ahead with proposals to impose tariffs on imported steel and aluminium.
The US dollar index, which measures the dollar against a basket of six major currencies, was as much as 0.1 per cent lower. It has fallen for the past two sessions.
“What we are seeing is that there is a lot more uncertainty regarding North Asian currencies as there is a lot more exposure regarding steel production and steel exports,” said Chang Wei Liang, an FX strategist with Mizuho Bank.
“As for the South-east Asian currencies, considering the much smaller exposure to steel, in fact they are net importers of steel products, that degree of uncertainty is not apparent.”
The Taiwan dollar was 0.06 firmer ahead of industrial output data for January being released later in the day.
Moving in the other direction, the Singapore dollar slightly weakened, slipping for the first time in three trading days.
Deeper into losing territory, the Korean won and the Philippine peso were weaker to the extent of 0.15 per cent and 0.13 per cent, respectively.
Equity markets in both countries slipped today. South Korea’s Kospi stock index fell as much as 1.1 per cent and the Philippine benchmark was as much as 1.2 per cent lower.
The Indian rupee gave back some gains made in the day after a survey showed service industries contracted in February.
However, it was still the strongest regional currency on the day, firming 0.21 per cent.
The Nikkei/IHS Markit Services Purchasing Managers’ Index fell to a six-month low of 47.8 in February.
The Malaysian ringgit gained 0.13 per cent, after data showed January exports grew at a much faster rate than expected.
Exports rose 17.9 per cent year-on-year in January, beating a Reuters poll median estimate of 11.4 per cent.
“I think this should reinforce confidence on part of BNM (Bank Negara Malaysia) that Malaysian growth is tracking higher, in line with prior expectations. That will enforce a bias to continue tightening policy, so that is a positive for the ringgit,” said Mizuho’s Chang Wei Liang. — Reuters
Source: The Malay Mail Online