Most Asian currencies rose on Thursday, led by gains in the South Korean won and the Japanese yen as the U.S. dollar weakened after President Donald Trump took a softer stance while affirming progress in U.S.-China trade negotiations.
The US Dollar Index, which measures the greenback against a basket of major currencies, slid 0.3% in Asia hours, reaching its lowest level in over six weeks.
The moves were also affected by expectations of Federal Reserve interest rate cuts this year after a benign consumer inflation print.
US Dollar Index Futures were also trading 0.3% lower.
Investors assess US-China trade progress; caution persists U.S. President Trump said on Wednesday that a trade framework with China is "done," subject to approval by him and President Xi Jinping.
The accord grants China export licenses for rare earth minerals and magnets, while the U.S. will allow continued access for Chinese students.
Washington will maintain a total tariff rate of approximately 55% on Chinese imports, with China retaining a 10% tariff on American goods, Trump said in a social media post.
Trump added he will send letters in the coming weeks to key trading partners, outlining "take it or leave it" tariff offers ahead of a July 9 deadline tied to his pause on sweeping “liberation day” tariffs. He said he is open to extending that deadline, but expects it won’t be necessary.
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These developments reduced some trade worries, but moves in global assets indicated that the decisions were already priced in. Moreover, markets have earlier seen Trump fluctuating his stance on tariffs.
Markets are awaiting more details on the proposed deal, leading to subdued moves in most currencies.
The Chinese yuan’s onshore USD/CNY and offshore USD/CNH pairs were both trading 0.2% lower on Thursday.
The Japanese yen’s USD/JPY pair fell 0.4%.
The South Korean won’s USD/KRW pair led gains, with the pair dropping 0.8% on optimism around newly elected President Lee Jae-myung’s promise to eradicate unfair trade practices in the stock market
The Singapore dollar’s USD/SGD was largely flat, while the Indian rupee’s USD/INR was also muted.
The Australian dollar’s AUD/USD pair fell 0.2%.
Soft US CPI spurs Fed rate cut bets Data on Wednesday showed that the U.S. consumer price index inflation rose less than expected in May.
The data was closely assessed to scrutinize for tariff‑related price pressures.
“Markets obviously like this, but we need to be careful of saying that tariff fears are overdone,” ING analysts said in a note.
The Fed is widely expected to hold rates unchanged next week amid tariff uncertainty.
