Asian Currencies Edge Higher as Dollar Slips Ahead of US-China Trade Talks

Jun 9, 2025 8:24 AM - Parth Sanghvi

Image credit: Maxim Hopman

Asian currencies saw modest gains on Monday, buoyed by a softer U.S. dollar ahead of high-stakes trade talks between the U.S. and China. While the Chinese yuan held steady following weak economic data, other regional currencies posted slight improvements, reflecting cautious optimism.

Dollar Dips as Markets Brace for Policy Signals

The U.S. Dollar Index fell 0.2% during Asian hours, reversing Friday's rally that followed a strong U.S. jobs report. Dollar Index futures, however, remained elevated, signaling potential volatility ahead of key events.

Investors are closely watching the U.S.-China trade discussions taking place in London, where Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer are set to meet China's Vice Premier He Lifeng.

The meeting aims to advance the tentative trade truce reached in Geneva last month, with the agenda covering:

Tariff rollbacks
Export controls on semiconductors and rare earths
A framework for broader trade cooperation

Regional Currency Moves

While hopes for improved geopolitical stability supported sentiment, most traders remained conservative ahead of concrete outcomes and the upcoming U.S. CPI inflation report later this week.

Key Currency Movements:

USD/SGD (Singapore dollar): down 0.2%
USD/INR (Indian rupee): down 0.2%
USD/KRW (South Korean won): down 0.2%
AUD/USD (Australian dollar): up 0.3%
USD/CNY (Chinese yuan): flat, following weak inflation and export data

What to Watch

With global macro indicators in focus, traders are balancing potential trade breakthroughs with inflation and interest rate risks. The upcoming U.S. Consumer Price Index (CPI) release is expected to significantly influence Fed rate expectations and risk sentiment.

For a broader picture of currency trends and potential inflection points, monitor the Forex Daily data for daily updates and the Economics Calendar for upcoming macroeconomic releases.

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