Asian currencies moved higher on Monday while the US dollar retreated, as investors reacted to fresh developments surrounding President Donald Trump’s tariff policies and ongoing uncertainty over Federal Reserve interest rate cuts. The US Dollar Index fell 0.4% during early Asian trading, with US Dollar Index futures also down 0.4% as of 05:04 GMT, reflecting softer demand for the greenback.
The Japanese yen strengthened, with USD/JPY dropping 0.5%, supported by renewed safe-haven demand amid global trade concerns. The South Korean won also gained ground, as USD/KRW slipped 0.2%. Meanwhile, the offshore Chinese yuan edged higher, pushing USD/CNH down 0.1%. These moves highlight shifting sentiment in the Asia forex market as traders assess the broader impact of US trade policy changes.
Last week, the US Supreme Court ruled that Trump’s earlier sweeping tariffs, introduced under emergency powers, were not legally justified. Markets initially viewed the decision as a potential de-escalation in US-China trade tensions and a positive signal for global economic growth. However, President Trump quickly announced a new 10% global tariff on imports for 150 days under Section 122 of US trade law, with plans to raise the rate to 15%, the maximum permitted under the statute.
The renewed tariff strategy has complicated the outlook for major Asian exporters such as Japan and South Korea, which rely heavily on US demand and had previously secured trade agreements or exemptions. Regional stock markets delivered mixed performances as investors weighed potential disruptions to supply chains and capital flows.
Adding to market caution, recent US economic data showed slower growth alongside persistent inflation, dampening expectations for near-term Federal Reserve rate cuts. In Asia, USD/INR remained largely flat, USD/SGD dipped 0.1%, and AUD/USD edged 0.2% lower, underscoring continued volatility in global currency markets.


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