HONG KONG: The US dollar climbed in Asian trade yesterday, buoyed by optimism over potential trade deals aimed at averting President Donald Trump’s sweeping tariffs.
Equities mostly advanced as markets awaited the US Federal Reserve’s policy decision.
While no agreements have been finalised, sentiment improved after US Treasury Secretary Scott Bessent revealed that 17 countries had offered “very good” trade proposals, including possible “substantial progress” with China—facing punitive tariffs as high as 145 per cent.
Trump has imposed 10 per cent baseline duties on most countries and 25 per cent on select goods like steel, aluminium, and autos.
The rising hopes of negotiated relief have spurred rallies in regional currencies, with Taiwan’s dollar up seven per cent this month.
Analysts suggest some governments may be allowing currency appreciation to curry favour with Washington.
“If these Asian nations are indeed opting for currency revaluation, it could help accelerate trade talks,” said Pepperstone’s Chris Weston.
Markets in Hong Kong and Shanghai led regional gains, though Sydney and Singapore edged lower. Traders shrugged off Wall Street’s pullback after Trump floated new tariffs on foreign-made films.
Meanwhile, oil rebounded over one percent after Monday’s slide, following OPEC+’s decision to raise June output by 411,000 barrels per day.
Eyes are now on the Fed, expected to hold rates steady despite Trump’s push for cuts. While Q1 GDP contracted, stronger jobs and services data have cooled rate-cut bets.
“So long as the real economy hums and new levies risk stoking inflation, Powell’s hawkish stance holds,” said SPI Asset Management’s Stephen Innes. – AFP
