Asian currencies swinging over their lowest levels in a few years, in light of the region’s suffering of customs definition policies pursued by President Donald Trump, threatening to push the global economy to a recession. The Bloomberg Dollar Index of Asia has dropped to the lowest level since 2006. The Korean has won to its lowest level since the global financial crisis, while the Australian and New Zealand dollars have decreased to the levels it has not seen since March 2020 before recovering. The Indonesian rupee reached its worst level, while the Chinese Yuan recovered in foreign markets from its lowest level, with Beijing reducing its grip on the currency to support the economy. Rapid fluctuations in Asian markets come in light of the traders’ concerns about reports associated with customs tariffs, because they are afraid that the increasing trade war between the United States and China will negatively affect global growth. Trump has promised to take more measures as countries respond to his customs fees. The origin of Southeast Asia has endured most of the sales operations, as the Indonesian Rupee and Thailand have been one of the worst performing currencies since the beginning of the year. Asian currencies suffering “in the event that more bad news of trading is received, we expect this effect to spread throughout the region and suffer Asian currencies,” according to Nick Todal, the main market analyst at Global Markets in Sydney. He added: “Since many of them lie on fragile levels at their lowest levels in a few years, the effect can be doubled with the decline of new domains.” While Vietnam, Indonesia and other countries sent commercial delegations to the United States to negotiate transactions and undertook to remove some of its barriers before imports, Treasury Secretary Scott said Japan would have the maximum priority in any talks. The Asian currency fluctuation index has jumped to its highest level since Trump was elected in November. It is likely that the volatility continues, as “we doubt that the Asian countries will reach a rapid agreement with Trump after the initial talks did not look encouraging,” according to Alex Lu, the strategic expert of the total economy of the Securities Company “TD Securities” in Singapore. He added: “The Trump administration believes strongly in customs.” Commercial pressure increases the trade war, the pressure the region already has to face. The Won has been one of the worst performances of the emerging markets since the effort by President Yun Suk Yol at the time in early December imposed the martial law. Although the decision of a Korean Court is expected to be expected to isolate Yun earlier this month in strengthening the color position, US customs duties, as well as to postpone the connection of South Korea to a global indication of effects, its weight has thrown on the currency. Strategic experts in Barclays, including Metol Cotsha, wrote in a memo: “The delay of the inclusion of the color in the global government context index” WGBI “can increase some negative pressure on the currency in the short term, but we do not expect it to continue.” They added that the risks indicate that the currency has reduced about 1500 WNA to the dollar before being provided with an additional trade agreement with the United States. In Indonesia, investors are already concerned about the populist measures of President Prabu Sobanto and its impact on economic growth. The United States is one of the largest commercial partners of Indonesia, and customs duties are expected to affect 32% on the most important sectors such as textiles, electronics and palm oil.
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