Asian currencies were subdued on Friday, while equities were mixed, as investors weighed the Federal Reserve’s expected dovish tilt and the impact of US import tariffs on regional economies.
Markets appeared unmoved by US President Donald Trump’s latest tariff moves, with the Indonesian rupiah trading flat, Malaysian ringgit and South Korean won losing 0.2 percent, and Thai baht slipping marginally by 0.1 percent.
Jakarta shares gained over 2 percent to their highest since July 30, while those in Kuala Lumpur advanced 0.4 percent, though Singapore and Seoul each fell 0.7 percent and 0.6 percent, respectively.
Despite Friday’s subdued trading, the week told a different story. The MSCI emerging market currency gauge added more than 0.6 percent, on track for its best week since June 23, while emerging Asian equities advanced more than 2 percent on a weekly basis.
The Thai baht gained more than 1.5 percent for the week, its best since May 19, while the rupiah IDR= added more than 1 percent weekly.
There was optimism over potential Fed rate cuts, fuelled by Trump’s nomination of dovish economist Stephen Miran to the Fed board, but also wariness over trade policy that has pushed average US import duty rates to century-high levels.
The Trump administration imposed tariffs on dozens of countries on Thursday, with rates ranging 10 percent to 50 percent, while adding 40 percent duties on products determined to be illegally rerouted to conceal their origin.
US imports from Southeast Asia’s biggest economiesnow face tariff rates of about 19 percent, significantly below earlier threatened levels.
The US dollar index was largely unchanged against six major peers on Friday, but nursed weekly losses of 0.6 percent as concerns over softening US economic momentum boosted hopes of Fed rate cuts.
BNP Paribas expects dollar weakness in the medium-term, with the euro positioned to gain most.
