01-08-2025
- Business
- New Straits Times
Asian currencies slide as Trump's tariff blitz triggers selloff
HONG KONG: Most Asian currencies slipped to multi-month lows on Friday, with South Korea's won and Malaysia's ringgit leading declines, as investors fled riskier regional assets after the US imposed sweeping new tariffs on dozens of trading partners.
The won bore the brunt of the selloff, tumbling 0.62 per cent to a two-month low of 1,400.6 against the US dollar, while the ringgit shed 0.5 per cent to hit its weakest level since June 23.
The broad-based retreat extended across the region, with the Philippine peso, Taiwan dollar and Thai baht all declining more than 0.3 per cent as the tariff fallout rippled through Asian markets.
The MSCI emerging market currency gauge has already fallen well over 1 per cent so far this week, snapping from a six month rally in July. It fell over 0.3 per cent on Friday.
Facing a Friday deadline of his making, US President Donald Trump has tapped emergency powers, pressured foreign leaders, and pressed ahead with trade policies that sparked a market sell-off when they were first announced in April.
Taiwan faces a "temporary" 20 per cent US tariff, with President Ching-te Lai and his cabinet saying the government will continue advocating for reasonable rates during final negotiations.
Malaysia secured a 19 per cent US tariff on its exports, down from Washington's previously threatened 25 per cent levy, the White House said. South Korea clinched a deal on Wednesday with reduced 15 per cent tariffs.
Vietnam, Indonesia, the Philippines, Japan, Cambodia and Thailand have already secured agreements. "The tariff announcement brings clarity in form but not in function.
We now have a list of countries and their respective rates, but the logic behind these numbers is far from transparent," said Charu Chanana, Chief Investment Strategist, Saxo, Singapore.
"The sweeping nature of the measures suggests that this isn't a one-time fix but the beginning of a new global trade regime that favours unpredictability over structure."
Meanwhile, the greenback has found support from fading prospects of imminent US rate cuts, with the dollar index up 2.5 per cent this, the highest level in two months. It edged up 0.3 per cent on Friday.
Equities largely inched up higher, with shares in Kuala Lumpur and Jakarta rising 1.1 per cent and 0.9 per cent. While those in Seoul slipped 3 per cent after South Korea's government put forward plans to roll back recently imposed tax cuts.
