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Most Asian currencies edge up after Xi vows to lower tariffs

China's yuan gains as much as 0.4 per cent, its biggest intraday percentage gain in over a week.  — Reuters pic
China's yuan gains as much as 0.4 per cent, its biggest intraday percentage gain in over a week. — Reuters pic

SINGAPORE, April 10 — Most emerging Asian currencies rose on today after President Xi Jinping said he would open China's economy further and cut import tariffs, easing fears of a US-China trade war and reviving appetite for riskier assets.

Speaking at the Boao Forum in Hainan province, Xi said China will sharply widen market access for foreign investors, a chief complaint of the country's trading partners and a point of contention for US President Donald Trump's administration, which has threatened billions of dollars in tariffs on Chinese goods.

The US dollar index against a basket of six major currencies reacted positively along with US stock futures, Asian shares, and other financial markets.

Markets have been rattled in past weeks by worries that tit-for-tat US-China tariff proposals could explode into a full-blown global trade war.

“The main driver is Xi's speech. He is backing down and reducing the trade tensions. He said 'lower' auto import tariffs, which is the opposite of the trend in recent weeks from both US and China in 'raising' tariffs,” said Sean Yokota, head of Asia strategy at Skandinaviska Enskilda Banken, Singapore.

“The reduction in trade tensions is good for global trade, growth and risk sentiment and helps EM currencies do well. Long yen positions are getting unwound as risk sentiment improves.”

Among Asian currencies, the Chinese yuan gained as much as 0.4 per cent, its biggest intraday percentage gain in over a week.

The Thai baht rose the most in over one week, adding as much as 0.2 per cent, while the Philippine peso and the South Korean won edged 0.1 per cent higher.

The Indian rupee and the Malaysian ringgit also rose up as much as 0.2 per cent, while the Singapore dollar and the Taiwan dollar posted marginal gains.


The yuan was the best performer among Asian currencies.

It had weakened against the US dollar yesterday after a report that China is evaluating the potential impact of a gradual yuan depreciation as a tool in the escalating trade dispute with the US.

“Well, the devaluation story goes completely away. We saw that China was not looking to devalue this morning as well since the yuan fixing came in line or slightly stronger today,” said Yokota.

“China has no intentions to weaken the currency to escalate trade tensions, and it is gaining. I have a 6.10 forecast on the yuan for the year-end.”

In the spot market, the onshore yuan opened at 6.3071 per US dollar and surged to a high of 6.2903 before changing hands at 6.2972 at midday, 154 pips firmer than the previous late session close. — Reuters

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