Emerging Markets - Asian currencies shine as Trump talks of likely Sino-US trade pact; Singapore dollar up 0.6% after c.bank loosens policy


SINGAPORE (Reuters): Currencies in emerging Asian markets jumped on Friday, with the ringgit, baht and rupiah touching multi-week highs after US President Donald Trump talked of a trade deal, rather than a trade war, with China.

The MSCI gauge of emerging market currencies rose 0.4% to its highest in seven weeks, while a gauge of emerging Asian equities was up 0.1%, easing from a 1% jump to a more-than-two-week high earlier in the day.

Trump told Fox News that his conversation with Chinese President Xi Jinping last week was friendly and he thought he could reach a trade deal with China.

Investors have been on edge since Trump threatened to impose major tariffs on China, but his latest comments hinted at a softer stance, triggering a rush to sell the dollar and lifting risk-sensitive assets in emerging markets.

The dollar index fell broadly, headed for its worst weekly fall in five months, following Trump's comments on China and his demands that the Federal Reserve cut interest rates, which is also a net positive for emerging markets.

Poon Panichpibool, a markets strategist at Krung Thai Bank, said he expects Asian currencies to strengthen further in the short term but cautioned that the tariff risk was not over. Wei Liang Chang, an FX and Credit strategist at DBS Bank, echoed the sentiment, saying, "We are not discounting the fact that tariffs could still be imposed... but perhaps at a more calibrated pace."

China's yuan surged to a 2-month high against the dollar, while stocks gained around 1.6%.

Malaysia's ringgit continued to surge, rising 1.4% to its highest since early November, while Indonesia's rupiah appreciated 0.7% to a two-week high.

The Philippine peso rose 0.5%, while the Thai baht advanced by 0.9% to its highest since early December.

Singapore's dollar strengthened 0.6% to its best level since mid-December as the city-state's central bank loosened its monetary policy for the first time in five years. In east Asia, the Bank of Japan raised interest rates to their highest since the 2008 global financial crisis.

Equities in emerging Asian markets were largely mixed. Stocks in Malaysia, Indonesia and the Philippines lost between 0.2% and 0.8%. Equities in Singapore were flat, while those in Thailand edged higher. - Reuters

Follow us on our official WhatsApp channel for breaking news alerts and key updates!

Next In Aseanplus News

Drones required to be registered in Cambodia after attack plot foiled
Vietnam to impose VAT on low-value express-imported goods
Thai PM: Six countries, one destination to solidify Asean as travel hub
Prabowo plans 15 megaprojects to continue downstreaming push of Jokowi
Marcos puts China at centre of Philippines poll campaign
Various activities planned in Singapore for Asean chairmanship, 60th anniversary of bilateral ties
Summer to start as Feb ends, bringing highs of 43�C for Thailand
Four Chinese among those killed in shop blast
Residents compete to name twin panda cubs
Militia moves to deport 10,000 cyber scam workers

Others Also Read