Asian Currencies Tread Water as Trade Tensions and Fed Outlook Weigh

Most Asian currencies traded in a narrow range on Monday, with the U.S. dollar slightly softer amid renewed U.S.-China trade uncertainty and dovish signals from Fed Governor Christopher Waller.

USD Under Pressure on Rate-Cut Hints

• Fed Governor Waller said he remains open to cutting interest rates later this year if economic conditions warrant, nudging the dollar lower.

• Weak Chinese PMI data (released over the weekend) also chipped away at regional risk sentiment, even though mainland markets were closed for a holiday, limiting volume.

To monitor these economic releases and Fed commentary, use the Economics Calendar API, which flags PMI prints, Fed speeches, and tariff-related announcements.

Yen Strengthens as Safe Haven

• USD/JPY fell 0.1%, driven by cautious positioning ahead of high-level trade talks between Tokyo and Washington.

• Heightened risk aversion—spurred by Trump's threat to double steel and aluminum tariffs to 50%—drew flows into the Japanese yen, a traditional safe-haven currency.

Real-time FX rates and intraday moves for JPY and other majors can be tracked via the Forex Daily API, which provides updated cross-currency pairs and volume data.

Yuan Weakness Amid Tariff Spat

• While onshore markets were closed, the offshore yuan (USD/CNH) rose 0.2%, reflecting underlying yuan weakness as traders assessed fresh trade tensions.

• China firmly rejected Trump's weekend claims that it violated the Geneva trade deal, deepening the rhetoric even though both sides agreed to cut tariffs drastically in May.

• Ongoing disputes—U.S. chip controls versus China's rare-earth export restrictions—continue to fuel volatility in the yuan.

Key Takeaways for Investors

1. Trade Talks in Focus: Keep an eye on upcoming U.S.-Japan and U.S.-China meetings. Any progress could alleviate risk-off flows and lift Asian FX.

2. Fed Rate Outlook: Further dovish Fed signals may keep the dollar under pressure, providing room for Asian currencies to firm.

3. PMI and PMI-Adjacent Data: A repeat of weak PMI readings would exacerbate pro-cyclical pressure and boost safe havens like the yen.