Emerging Asian currencies strengthened on Monday as uncertainty over U.S. trade policy kept the dollar under pressure, while regional equities moved higher, spearheaded by gains in South Korea and Taiwan. MSCI's emerging market currency index (.MIEM00000CUS), opens new tab climbed 0.24%, hovering just below its record peak hit on February 12. The Reuters Inside Track newsletter is your essential guide to the biggest events in global sport. Sign up here. The Malaysian ringgit advanced 0.4%, while the Philippine peso rose 0.9% to its highest level since late September, as a softer dollar index lent support. Advertisement · Scroll to continue
The dollar index weakened after President Donald Trump unveiled a blanket 15% import levy in response to a U.S. Supreme Court ruling against his sweeping tariffs. A 15% global tariff rate would be a modest relief for India and ASEAN economies like Malaysia, Thailand, Indonesia, the Philippines and Vietnam, according to analysts at Barclays, though the levy would be higher for Singapore with a present rate of 10%. The Singapore dollar edged up 0.2% and the South Korean won , Thai baht and Taiwanese dollar all gained over 0.3%. The narrative in Asian emerging markets has shifted from tariff fears to competitiveness, with supply chains viewed as more diversified than in 2018 and economies tied to AI hardware, capital goods and advanced manufacturing viewed as better positioned than pure export plays, said Billy Leung, investment strategist at Global X ETFs Australia. Advertisement · Scroll to continue
Regional equities advanced, with Taiwan's benchmark (.TWII), opens new tab touching a record high of 34,212.38 points before closing 0.5% higher. Shares of contract chip giant TSMC (2330.TW), opens new tab jumped 1% to a record. South Korea's KOSPI index (.KS11), opens new tab, another key beneficiary of advancements in AI, gained 0.7%. The benchmark rose 2.1% earlier in the day, to hit a record high. Investors are bracing for earnings later in the week from AI heavyweight Nvidia (NVDA.O), opens new tab, which commands almost 8% of the S&P 500 and has the heft to move markets. "The current environment is increasing dispersion within emerging Asia, AI-linked North Asia continues to attract flows, while trade-sensitive and high-beta markets remain vulnerable to policy shocks," said Glenn Yin, director of research at AC Capital Market. Indonesian stocks (.JKSE), opens new tab rose 1.4% after the Indonesia Stock Exchange late on Friday unveiled a series of capital market reforms, following a January warning from MSCI (MSCI.N), opens new tab that the country risked a downgrade to frontier status by as early as May.
