Asian currencies weakened broadly on Monday as persistent uncertainty over the U.S.-China trade war kept risk appetite depressed. Meanwhile, the U.S. dollar saw modest gains, reflecting cautious investor sentiment in global markets.
Trade War Jitters Continue to Weigh on Markets
Recent comments from U.S. Treasury Secretary Scott Bessent added fuel to market concerns. Bessent admitted there was little clarity over any ongoing dialogue between President Donald Trump and Chinese President Xi Jinping, and noted that any communication with Chinese officials had occurred through the International Monetary Fund (IMF), not direct trade negotiations.
Key highlights:
Mixed signals from Washington and Beijing
No formal confirmation of active trade negotiations
Beijing has denied Trump’s claims of ongoing talks
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Regional Currency Movements
Most Asian currencies remained under pressure after steep losses over recent weeks.
The Japanese yen was a rare outperformer, benefiting from safe haven demand ahead of a critical Bank of Japan policy meeting this week.
Other currencies, such as the South Korean won and the Indian rupee, continued to slide due to weak risk sentiment.
Dollar Edges Higher
The U.S. dollar index and dollar index futures rose about 0.2% during Asian trading hours, although the greenback remains close to a three-year low touched earlier in April.
The uptick reflects:
Cautious demand for safe assets
Heightened concerns about the U.S. economy’s vulnerability under an aggressive trade policy
Volatility in U.S. Treasury markets, signaling broader market anxiety
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Final Thoughts
With Trump’s shifting tariff strategies and inconsistent messaging from U.S. officials, investors continue to tread cautiously. Until there’s credible progress on trade talks, volatility across currencies and safe haven flows are likely to dominate the near-term outlook.
