Most Asian currencies moved within narrow ranges on Tuesday, while the U.S. dollar held firm as investors assessed the impact of newly announced U.S. tariff measures. Currency markets showed limited volatility across the region, reflecting a cautious tone among traders.
The US Dollar Index rose 0.2% during Asian trading hours after finishing largely unchanged overnight, having recovered from earlier losses. US Dollar Index Futures also gained 0.2% as of 23:54 ET (04:54 GMT), signalling continued support for the greenback.
Markets Assess Impact of New Trump Tariffs
Investor sentiment remained restrained as uncertainty persisted over the scope and longevity of the latest import duties introduced by U.S. President Donald Trump. The new measures followed a ruling by the U.S. Supreme Court that struck down a previous emergency tariff programme.
President Trump subsequently announced a 15% global tariff on imports. He also cautioned that countries attempting to delay or complicate trade negotiations could face even higher levies. The remarks fuelled fresh concerns that global trade tensions may escalate once again.
As a result, regional currencies—particularly those in export-driven economies—remained under pressure. Markets are closely watching how renewed trade friction could affect global demand and supply chains.
Analysts at MUFG noted that most countries are still expected to honour existing trade agreements, although some may temporarily reassess their positions in light of the latest developments.
Asian Currency Performance
The Japanese yen weakened modestly, with the USD/JPY pair rising 0.4% amid reduced expectations of near-term policy tightening by the Bank of Japan.
Other regional moves were limited. The South Korean won saw the USD/KRW pair edge up 0.1%, while the Singapore dollar’s USD/SGD pair gained 0.1%. The Indian rupee remained broadly unchanged against the dollar. Meanwhile, the Australian dollar strengthened slightly, with AUD/USD climbing 0.1%.
China Holds Loan Prime Rates Steady
In China, the onshore yuan saw the USD/CNY pair dip 0.2%. The People’s Bank of China left its one-year and five-year loan prime rates unchanged, in line with market expectations.
The steady policy decision highlights Beijing’s preference for measured economic support, as authorities aim to stabilise growth while managing financial risks.
Chinese financial markets resumed trading on Tuesday following the Lunar New Year holiday.
