US President Donald Trump’s imposition of tariffs on several countries has led to a sharp decline in Asian currencies against the greenback. The dollar index jumped 1.11% to 109.58, putting pressure on regional currencies.
The Chinese offshore yuan dropped 0.36% to 7.347 against the dollar, following Trump’s 10% duty on Chinese exports. Major investment banks predict the yuan will weaken to an average of 7.51 per dollar by year-end due to the tariffs.
India, which cut its fiscal deficit to 4.4% of GDP in its budget, saw the rupee fall to a record low of 87.101 against the dollar, weakening 0.66%. The South Korean won depreciated 0.83% to 1,467.65 and the Japanese yen weakened 0.19% to 155.47.
However, Australia’s currency defied the trend, appreciating 1.51% to 0.6117 against the greenback. Analysts warn that uncertainty remains, but Trump’s actions often have a significant impact on markets.
“We’re going to see the Chinese currency moving up,” said Ray Attrill, global head of foreign exchange at National Australia Bank. “This would imply material downside for emerging market currencies.”
Source: https://www.cnbc.com/2025/02/03/asian-currencies-weaken-as-us-dollar-strengthens-after-trump-levies-tariffs.html