Asian Currencies Edge Up as Dollar Slips Ahead of US-China Trade Talks; Yuan Flat on Weak Data
Most Asian currencies posted modest gains on Monday, supported by a softer U.S. dollar as investors awaited high-level trade negotiations between Washington and Beijing in London later in the day. Meanwhile, the Chinese yuan remained largely unchanged following underwhelming inflation and export data.
The U.S. Dollar Index—tracking the greenback against six major currencies—fell 0.2% during Asian trading hours, pulling back after Friday’s surge driven by stronger-than-expected U.S. jobs numbers. Dollar Index futures, however, were slightly higher, up 0.2%.
Asia FX Rises on Trade Optimism
Markets turned their attention to upcoming U.S.-China trade talks, where Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer are scheduled to meet Chinese Vice Premier He Lifeng. The meeting builds on last month’s tentative agreement in Geneva and aims to address tariff reductions, export controls on technology and rare earths, and a broader trade framework.
Investor sentiment was cautiously optimistic, with hopes that the talks might help de-escalate trade tensions and clarify policy direction. However, markets remained restrained as traders awaited concrete outcomes from the discussions, especially with key U.S. inflation data due later this week.
Currency Moves Across the Region
- The Singapore dollar strengthened slightly, with USD/SGD down 0.2%.
- The Indian rupee also firmed, with USD/INR down 0.2%.
- South Korea’s won saw similar movement, with USD/KRW declining 0.2%.
- The Australian dollar rose more notably, with AUD/USD gaining 0.3%.
China and Japan Economic Data in Focus
The Japanese yen advanced, with USD/JPY down 0.3%, following data showing Japan’s economy contracted slightly less than initially reported in Q1, despite sluggish consumer activity and weakened exports amid global trade pressures.
In China, both the onshore (USD/CNY) and offshore (USD/CNH) yuan pairs were little changed. Recent data revealed that consumer price growth slowed for a fourth consecutive month in May, while producer prices saw their sharpest decline in nearly two years.
China’s export performance also fell short of forecasts due to ongoing U.S. tariffs dampening external demand. However, the country’s trade surplus widened more than expected in May, driven by a sharp drop in imports.
