Asian Currencies Steady as Markets Await China Stimulus and Trump Trade Impact

Asian Currencies Stabilize as Markets Await China Stimulus

Most Asian currencies remained stable on Thursday, as investors awaited clearer signals on potential financial stimulus from China. Meanwhile, the U.S. dollar maintained its strength, reaching 2.5-month highs driven by rising speculation over Donald Trump's possible second term as president.

Dollar Steadies on Trump Trade Prospects

The U.S. dollar index saw a slight dip in Asian markets but stayed near its peak since early August. Predictions of a Trump re-election, which crypto betting platforms like Polymarket currently favor, have boosted the dollar. While some media polls show Vice President Kamala Harris with a narrow lead, Trump’s policies—such as tariff increases and closer Fed coordination—are expected to drive inflation, bolstering both the dollar and U.S. Treasury yields.

Adding to the dollar's strength was the euro's decline ahead of an anticipated European Central Bank interest rate cut.

Chinese Yuan Slips Amid Housing Stimulus Concerns

The Chinese yuan weakened slightly, with the USDCNY pair rising by 0.1%. Investors were disappointed by the latest housing sector stimulus measures, which fell short of expectations during a government briefing. With third-quarter GDP data expected on Friday, markets are watching for further indicators of China's economic health.

Regional Currencies Mixed as Dollar Strengthens

Across the region, currency performance varied. The Japanese yen was flat amid a larger-than-expected trade deficit, while the Australian dollar gained 0.2% due to robust labor market data. South Korea’s win rose 0.4%, but the Indian rupee hovered near record lows.