Asian currencies rose slightly on Monday as the U.S. dollar weakened ahead of President-elect Donald Trump’s inauguration. Markets remained cautious amid concerns about potential trade tariffs on Chinese exports, which could trigger a trade war and impact trade-dependent Asian economies.
The US Dollar Index dropped 0.3% during Asian trading, retreating from a 26-month high reached last week. Dollar Index Futures were also down 0.3%, reflecting a continued retreat after the Federal Reserve’s hawkish stance last month.
The Chinese yuan showed muted movements despite the People’s Bank of China (PBOC) maintaining its loan prime rates. The onshore USD/CNY pair inched up 0.1%, while the offshore USD/CNH gained 0.2%. The PBOC kept its one-year loan prime rate steady at 3.1% and its five-year rate at 3.60%, aiming to support the yuan, sustain liquidity, and bolster economic recovery.
The Japanese yen’s USD/JPY pair fell 0.3% as markets anticipated an interest rate hike from the Bank of Japan (BOJ) in its upcoming policy meeting. Sources suggest the BOJ is likely to continue raising rates if economic recovery persists.
The Malaysian ringgit’s USD/MYR pair slipped 0.1% ahead of Bank Negara Malaysia’s rate decision, with analysts expecting rates to remain at 3.00%. Meanwhile, the Australian dollar rose 0.2%, and the Singapore dollar fell 0.3%.
The South Korean won declined 0.4% as political turmoil weighed on the currency. The Thai baht remained stable, and the Indian rupee edged 0.1% lower.
Asian currency markets will closely watch developments following Trump’s inauguration, with trade policies expected to influence future movements.


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