SINGAPORE, April 11 — Most emerging Asian currencies crept higher against the US dollar today, as Chinese President Xi Jinping's promise to cut import tariffs eased concerns about a US-China trade conflict, sending investors back into growth assets.
Xi promised yesterday to open the country's economy further and lower import tariffs on products like cars. The US dollar's index versus a basket of six major peers last stood at 89.588, its lowest level since March 28.
Global equities rallied and oil prices surged on Xi's comments as fears about the risk of a trade war between the world's two largest economies receded.
The improvement in risk sentiment gave a boost to commodities-linked currencies and emerging market currencies and weighed on the US dollar as well as the Japanese yen.
“Yesterday, Xi's speech and (U.S. President) Trump's reply were perceived as conciliatory. The Xi-Trump bromance managed to ease trade tensions a little, so the moves have taken place overnight,” said Christopher Wong, a Singapore-based FX strategist with Maybank.
“For the US dollar, we still see downside pressure overall, but the downside may be cushioned leading into the consumer price index data later today and the FOMC minutes. Any hint of faster than gradual pace of Fed tightening and higher CPI print could lend some temporary support to the dollar in the interim.”
The US dollar could take its cues from U.S. consumer inflation data for March, as well as the minutes of the Federal Reserve's March meeting.
The Philippine peso rose as much as 0.2 per cent to its highest in nearly six weeks, making it the biggest advancer in the region.
The Thai baht and the Singapore dollar edged up as much as 0.1 per cent, while the Taiwan dollar and Indonesia's rupiah remained little changed.
Meanwhile, the Indian rupee dragged the most in the region, down as much as 0.3 per cent to a one-week low.
The Chinese yuan lost as much as 0.1 per cent, while the Malaysian ringgit and the Korean won skidded lower.
China's factory-gate inflation cooled to a 17-month low in March and consumer inflation also eased sharply in the previous month as the effects of booming demand spurred by the Lunar New Year holiday in February receded, official data showed today. — Reuters