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Views Article – Sharenet Wealth

Asia, Forex

Asian currencies slide as Trump unveils more tariffs

* Chinese yuan weakens 0.8% to 8-mth low * Indonesian cenbank intervenes as rupiah eases up to 0.8% * S.Korean won at lowest level since Jan 2017 (Adds text, updates prices) By Niyati Shetty Aug 2 (Reuters) – Most Asian currencies tumbled on Friday as investors scrambled to safety after U.S. President Donald Trump said he would slap more tariffs on Chinese goods, escalating trade tensions. The Chinese yuan weakened up to 0.8% to 6.950, inching closer to the psychologically crucial 7 per dollar mark. The currency hit its lowest since late November 2018. Trump on Thursday said he would impose 10% tariffs on the remaining $300 billion of Chinese imports starting Sept. 1, marking an end to a temporary truce in a trade war between the world’s largest economies. “Trump’s propensity to agitate with his inflated, if not imagined hand, “holding all the cards”, is a dangerous thing given that global trade is a “house of cards” … and China is not about to fold,” Vishnu Varathan, senior economist at Mizuho Bank wrote in a note. Senior Chinese diplomat Wang Yi on Friday said the additional tariffs were “not a correct way” to deal with the bilateral dispute. The safe haven Japanese yen strengthened against the dollar on Friday as market sentiment soured for riskier assets. The Taiwan dollar softened 0.5% to a six-week low, while the Indian rupee eased 0.4%. The Malaysian ringgit weakened 0.2% as government data showed exports fell, contrary to expectations for an increase, as shipments to key markets tumbled. INDONESIA TO DEFEND RUPIAH The rupiah declined as much as 0.8% to 14,225 against the dollar, its weakest level since June 20, prompting the central bank to intervene. Bank Indonesia on Friday said it would intervene in the spot foreign exchange, domestic non-deliverable forward and bond markets to stabilise the rupiah. “The depreciation was triggered by profit taking in the bond market that we think is temporary, due to risk-off after the U.S. applies more tariffs to China,” a senior official said. TRADE TROUBLES DAMPEN WON The won slipped 0.7% on the dollar as tensions with Japan compounded concerns for the trade-reliant economy. The currency fell to its weakest since January 2017. Tokyo said on Friday it would remove South Korea from its easy-trade “white list”, drawing the threat of a firm response from Seoul. Tensions between the U.S. allies escalated last month after Japan tightened curbs on exports of high-tech materials to the country. South Korean authorities were suspected of selling dollars to curb the won’s fall, helping the currency cut some of its losses, dealers told Reuters. The following table shows rates for Asian currencies against the dollar at 0517 GMT. CURRENCIES VS U.S. DOLLAR Currency Latest bid Previous day Pct Move Japan yen 107.090 107.33 +0.22 Sing dlr 1.376 1.3767 +0.08 Taiwan dlr 31.340 31.182 -0.50 Korean won 1196.800 1188.5 -0.69 Baht 30.880 30.86 -0.06 Peso 51.350 51.29 -0.12 Rupiah 14215.000 14110 -0.74 Rupee 69.280 69.05 -0.33 Ringgit 4.152 4.144 -0.19 Yuan 6.936 6.8979 -0.55 Change so far in 2019 Currency Latest bid End 2018 Pct Move Japan yen 107.090 109.56 +2.31 Sing dlr 1.376 1.3627 -0.94 Taiwan dlr 31.340 30.733 -1.94 Korean won 1196.800 1115.70 -6.78 Baht 30.880 32.55 +5.41 Peso 51.350 52.47 +2.18 Rupiah 14215.000 14375 +1.13 Rupee 69.280 69.77 +0.71 Ringgit 4.152 4.1300 -0.53 Yuan 6.936 6.8730 -0.91 (Reporting by Niyati Shetty in Bengaluru Editing by Jacqueline Wong)


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