Tensions between Washington and Beijing Press Asian currencies to their lowest level in 5 months

Asian currencies have dropped at their lowest levels since May, after renewed trading tensions between the United States and China were cautious among traders. Bloomberg Asian Currency Index against the US dollar in place trade fell 0.2% to 91.51 on Monday, the lowest level since May 9. The export-dependent Taiwanese dollar and the South Korean recorded the biggest losses under emerging market currencies in Asia. Trump’s threat ignited the tension of the trade. These moves came after US President Donald Trump announced on Friday that he would impose additional 100% tariffs on China from November 1, in addition to the restriction on the execution of important software. But on Sunday, Trump expressed openness about the possibility of reaching an agreement with China. Also read: Trump: Laying additional 100% rates on China. Lloyd Chan, a strategist at Mufg Bank, said: “The markets of Asia are in a state of risk -after Trump’s threat to set up 100% rates on China, the fear of a new escalation in trade tensions is imposed between the two countries.” “Currencies closely linked to the prospects for the Chinese economy and the world trade, such as the Korean Won, the Taiwanese Dollar and the Malaysian Ringgit, could be under extra pressure.” The MSCI emerging market currency index still dropped for the fifth day in a row. However, the Yuan traded outside China after the People’s Bank of China has determined the strongest reference exchange rate for the currency since November. Regional supplies fell as the caution escalated and the wave of risk -turned beyond currency markets, as regional shares dropped. The MSCI Emerging Markets Index fell by 2%, the largest daily decline since April. Apart from the trade dispute, regional currencies are under extra pressure, as Indonesia and Philippines suddenly lower interest rates, which increase bets on similar steps in other Asia countries. Fed -sharpening reinforced dollar strength at the same time, Federal Reserve officials are careful about further reduction of interest rates, strengthening the dollar and increasing pressure on Asian currencies. Also read: Chairman of the Federal Reserve: No monetary policy path is risk-free domestic factors, such as corruption adoptions facing the Philippine government, and financial uncertainty under the new Indonesian finance minister Purbaya Yudi Sadoa, holding extra wind for Asian currencies.