Latest news with #BloombergAsiaDollarIndex
The Star
01-08-2025
- Business
- The Star
Asian currencies fall to two-month low as tariff deadline nears
MANILA (Bloomberg): Asian currencies slid to a two-month low, weighed by a resilient dollar and uncertainty over US tariff talks with some countries. The Bloomberg Asia Dollar Index fell as much as 0.2% in early trading to the lowest level since May 19. The Philippine peso led declines, as elevated oil prices fueled concerns over the nation's crude import bill. The Indian rupee hovered near record lows. Regional currencies were set to cap their biggest monthly loss this year as the greenback surged after the Federal Reserve held benchmark interest rates. Expectations for a September rate cut have also eased following robust US economic data. Meanwhile, sentiment remains cautious with some countries yet to finalize trade agreements with the US ahead of the Aug. 1 deadline. "Asian FX markets continue to be shaped by persistent US dollar strength,' said Shier Lee Lim, lead FX strategist at Convera in Singapore. "The upcoming tariff deadlines and ongoing negotiations involving Malaysia and Thailand remain key flashpoints for market sentiment, as investors look for signs of progress or further escalation.' Central banks across the region have stepped up intervention efforts to stabilize their currencies. The Hong Kong Monetary Authority stepped in to buy HK$3.925 billion to defend the currency peg, while Indonesia's central bank intervened in the foreign-exchange markets. The People's Bank of China set a stronger-than-expected fixing to support the yuan. The Mexican peso led gains among emerging market peers after people familiar with the plans said President Donald Trump and his Mexican counterpart, Claudia Sheinbaum, plan to speak by phone, raising hopes for progress in trade discussions. Over in stocks, the MSCI Emerging Market Index fell to a two-week low. Stocks on mainland China and Hong Kong declined more than 1.5% following weaker-than-expected PMI data and as traders await the outcome of US-China trade talks. Benchmarks in South Korea also fell as disappointing earnings from Samsung Electronics Co. weighed. "Tariffs continue to impact sentiment and activity,' said Tony Sycamore, an analyst at IG in Sydney. "There remains some uncertainty as to whether China and the US can extend their trade pause for another 90 days.' --With assistance from Matthew Burgess. -- ©2025 Bloomberg L.P.
Bloomberg
31-07-2025
- Business
- Bloomberg
Asian Currencies Fall to Two-Month Low as Tariff Deadline Nears
Asian currencies slid to a two-month low, weighed by a resilient dollar and uncertainty over US tariff talks with some countries. The Bloomberg Asia Dollar Index fell as much as 0.2% in early trading, to the lowest level since May 19. The Philippine peso led declines, as elevated oil prices fueled concerns over the nation's crude import bill. The Indian rupee hovered near record lows.
Business Times
24-07-2025
- Business
- Business Times
Thai baht rises to highest since 2022 on trade optimism, inflows
[SINGAPORE] Thailand's baht rose to the highest in more than three years on growing optimism over trade negotiations, the return of foreign stock inflows, and near-record high gold prices. The local currency strengthened 0.1 per cent to 32.12 per US dollar on Thursday (Jul 24), the strongest since February 2022. Finance Minister Pichai Chunhavajira said on Tuesday the nation is close to an agreement with the US to lower a threatened 36 per cent tariff on its goods ahead of the Aug 1 deadline, and expects a rate closer in line with regional neighbours. The baht has gained almost 7 per cent this year, putting pressure on authorities to curb its strength to protect the nation's economic drivers of tourism and exports. 'Bank of Thailand will continue to watch for any excessive volatility,' said Christopher Wong, senior foreign-exchange strategist at OCBC in Singapore. A break of the resistance level at 32 to 32.1 baht per US dollar may add more tailwind to the currency, he said. Thailand's foreign-exchange reserves climbed to a record US$263 billion earlier in July, partly as officials stepped up their intervention to slow the baht's appreciation. Easing tensions between two of Thailand's largest trade partners, the US and China, are also soothing investor worries. Global funds have poured a net US$345 million into Thai equities in July, on track for the first monthly inflow in 10 months. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up On Wednesday alone, global funds poured in US$139 million into stocks, the largest single-day inflow in 10 months. The baht is also underpinned by near-record high gold prices, given the country's status as a major trading hub for the precious metal in Asia. Asian currencies Asian currencies have rallied this year as the US dollar weakened on concerns over the impact of US President Donald Trump's tariffs on the US economy. The Bloomberg Asia Dollar Index surged 7 per cent in 2025. In Thailand, the rebound in the baht is adding to concerns over the nation's economic growth, prompting some ministers and business groups to call for the central bank to weaken the currency. Tourism is faltering with the Tourism Authority of Thailand lowering its forecast for foreign tourist arrivals in 2025 to 35 million from 40 million. BLOOMBERG
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Business Standard
11-07-2025
- Business
- Business Standard
Emerging market assets weighed down by Trump's blanket tariff threat
By Marcus Wong and Kerim Karakaya Emerging-market currencies and stocks fell after President Donald Trump signaled he is eyeing blanket tariffs of 15 per cent to 20 per cent on most of America's trading partners. The MSCI index tracking developing-world currencies edged lower, with the South African rand and the Mexican peso leading the losses. The Bloomberg Asia Dollar Index is down 0.4 per cent this week, on track for its biggest weekly loss in six weeks. An index for EM equities also weakened. In his latest comments, Trump also threatened a 35 per cent tariff on some Canadian goods, adding to investor jitters. Still, some investors remained optimistic that the longer-term trends boosting developing economies will continue despite Friday's retreat. Markets have been on the edge this week as the fresh tariff announcements appearead to undo earlier relief when Trump delayed the effective date for most US levies to Aug. 1 from July 9. Investors will be closely watching US inflation data due on Tuesday for any impact from tariffs, as well as that on the Federal Reserve's policy trajectory. 'Growing confidence the Fed can achieve a soft landing and resume its easing stance in September together with strong technicals have provided a boost to EM high yield,' Faergemann said.
AllAfrica
23-06-2025
- Business
- AllAfrica
US strike on Iran triggers oil shock in Asia
A targeted US military strike on Iranian military assets has reignited geopolitical risk in global markets, and the immediate fallout is being felt most acutely across emerging Asia. Asian currencies, equities and bonds are under renewed pressure as investors price in higher energy costs, a potential capital exodus and a delayed path to monetary easing. The Bloomberg Asia Dollar Index dropped 0.3%, its largest single-day decline in weeks. The South Korean won and Indonesian rupiah led regional currency losses, while equity markets from Manila to Seoul posted declines. The driver is oil. Brent crude has surged toward US$80 per barrel on concerns that the confrontation may escalate and disrupt crude flows through the Strait of Hormuz. Nearly a third of all global maritime oil passes through that narrow chokepoint. Any material disruption to this corridor will have a disproportionate effect on Asia, which imports the overwhelming majority of its energy. India, for example, imports more than 85% of its crude oil. Indonesia and the Philippines are similarly exposed. South Korea, Japan and Thailand—all manufacturing powerhouses—are highly sensitive to fuel costs. Any sustained increase in crude prices will directly impact consumer inflation, industrial production costs and current account balances. Bond markets have begun to reflect this risk shift. Yields on Indian, Indonesian, and Thai local currency bonds are rising as investors adjust for the dual risk of rising inflation and capital outflows. Foreign holdings in Asian debt had been increasing over the last two months, supported by disinflation and expectations of rate cuts. This trend could now be at risk. The Indian rupee, in particular, is facing renewed headwinds. Widening trade and fiscal deficits leave the currency vulnerable to sustained oil shocks. The Reserve Bank of India may find its room to cut rates narrowing, especially if the inflation pass-through accelerates. Similar dynamics are at play in the Philippines, where food and fuel make up a large portion of the inflation basket. South Korea's won is under pressure not only from energy prices but also from broader sensitivity to global supply chains and shifts in investor sentiment. The Bank of Korea has kept monetary policy tight to manage household debt and inflation expectations, but a prolonged energy spike may force it to choose between growth and price stability. Thailand and Indonesia, while more domestically driven, are still at risk. Thailand's tourism recovery could slow if global travel costs rise. Indonesia's central bank has only recently managed to stabilize the rupiah through rate hikes, and another round of external pressure could complicate that progress. Meanwhile, China—the world's largest oil importer—faces a different but equally significant challenge. While it holds substantial strategic reserves and maintains long-term import contracts, a spike in crude still threatens margins for exporters and industrial firms. Higher shipping and insurance costs through the Gulf would only add to the pressure. With domestic demand already uneven, any input cost inflation from energy may undermine China's fragile recovery momentum. The broader message is this: Asia's exposure to oil imports and trade routes leaves it vulnerable in moments of geopolitical volatility. If Brent moves above $85 and stays there, inflation expectations across the region will rise again. That would likely derail any near-term plans for rate cuts in India, Indonesia, the Philippines, or South Korea. Central banks could be forced to hold or even hike again—at the cost of growth. Market flows are adjusting accordingly. The dollar is strengthening. Gold prices are climbing. Demand for safe-haven assets is rising, while risk appetite in Asia is diminishing. These aren't knee-jerk reactions. They reflect deeper concern about how the current conflict might evolve and how exposed Asia remains to external energy shocks. The coming days will be crucial. If Iran retaliates or the conflict escalates, markets will reprice even further. The possibility of another round of global energy inflation is now being reflected in commodity markets and FX volatility. Investors in Asia must now re-evaluate their positioning. Countries with better energy self-sufficiency, lower debt and stronger current account balances will fare better. Others will face rising fiscal and monetary constraints as the cost of energy, debt service, and currency defense rises simultaneously. The uneasy calm that had returned to emerging Asia has been disrupted. This is not yet a regional crisis—but it is a clear warning that the balance between growth and inflation remains precarious. Energy prices are once again the most important variable for policymakers and geopolitical risk is back as a central driver of capital markets. Asian economies must brace for further volatility. For investors, selectivity will be critical. The ability to differentiate between vulnerable and resilient markets will define outcomes in the months ahead.
