Asian Currencies Weaken as Dollar Gains on U.S. Tariffs

Asian currencies declined on Tuesday, while the U.S. dollar edged higher after President Donald Trump imposed tariffs on metal imports, fueling concerns over a potential trade war.

Trade-sensitive currencies, including the South Korean won, Australian dollar, and Singapore dollar, were among the biggest losers. The Japanese yen saw some safe-haven demand, limiting its losses, while the Chinese yuan remained stable.

The dollar index rose 0.1%, extending gains from the previous session. Trump signed executive orders imposing 25% tariffs on steel and aluminum imports, with potential for additional tariffs. Traders speculated that these measures could drive inflation, influencing future interest rate decisions.

The USDKRW and USDSGD pairs increased by 0.2% and 0.1%, respectively, while the AUDUSD fell 0.2%, despite positive consumer sentiment data in Australia. The yen held near a two-month low as bets on Bank of Japan rate hikes increased. The Chinese yuan remained steady, backed by Beijing’s intervention following recent U.S. tariffs.

India’s rupee stabilized after nearing record lows, supported by the Reserve Bank of India. However, concerns grew after Trump’s top economic adviser, Kevin Hassett, criticized India’s high import tariffs. Reports suggested Prime Minister Narendra Modi is preparing tariff cuts on key sectors, including electronics and medical equipment, ahead of discussions with Trump.

Market participants now await key U.S. inflation data, expected to influence the Federal Reserve’s rate outlook. Asian currencies remain under pressure amid growing trade tensions and shifting monetary policies.