Asian currencies advanced on Monday, buoyed by a weaker U.S. dollar, while regional equities climbed on growing expectations that the U.S. Federal Reserve could ease monetary policy to counter mounting economic strain from new tariffs.
Leading the currency rally, the Malaysian ringgit rose 1% to 4.233 against the greenback, snapping a six-day losing streak. The Indonesian rupiah and Taiwan dollar each gained up to 0.7%, while the Philippine peso firmed by 0.57%. The South Korean won and Singapore dollar also edged 0.2% higher.
The dollar index saw a slight rebound after plunging more than 1% on Friday, following the announcement of sweeping U.S. tariffs by President Donald Trump and a disappointing jobs report that intensified speculation over imminent Fed rate cuts.
“Investor focus has shifted from the uncertainty around new trade measures to the broader implications of existing tariffs,” Maybank analysts noted.
“While the U.S. dollar could remain range-bound in the near term amid competing concerns over growth and inflation, we anticipate a gradual economic slowdown and a renewed Fed easing cycle to ultimately drive the dollar lower,” they added.
Asian equity markets largely posted gains as expectations of reduced borrowing costs lifted sentiment. Benchmarks in Seoul and Singapore climbed as much as 1%, while markets in Mumbai, Bangkok, and Manila gained between 0.4% and 0.8%.
However, Jakarta and Kuala Lumpur bucked the trend, each declining over 0.3%.
Attention now turns to key U.S. data due this week — including ISM services and jobless claims — which will be crucial in shaping expectations for future Fed action.
Meanwhile, Trump’s tariff measures have imposed duties ranging from 15% to 40% across several Asian nations. India is facing the highest rate among major economies at 25%, while South Korea managed to reduce its rate to 15% following intensive negotiations.
Other countries such as Vietnam, Indonesia, the Philippines, Japan, and Cambodia have reached agreements after prolonged discussions, prompting a reassessment of which economies are most vulnerable to export disruptions.
“This outcome is better than initially feared, but the imposed tariff rates still represent a significant escalation from previous levels,” said Rahul Bajoria, ASEAN and India economist at BofA Securities.
Regional central bank policy remains in the spotlight. The Monetary Authority of Singapore and the Bank of Japan held their rates steady last week alongside the Fed. India’s central bank is set to meet on Wednesday, followed by Thailand’s decision next week.
