Asian currencies weakened on Tuesday, led by the Thai baht and the Indonesian rupiah, as investors focused on upcoming US trade negotiations and the looming August 1 tariff deadline set by US President Donald Trump.
Thailand expects to conclude trade talks with the United States, its largest export market, before the deadline and avoid tariffs as high as 36 percent, Finance Minister Pichai Chunhavajira said, riding the momentum from Trump’s deal with Europe over the weekend.
The Thai baht weakened as much as 0.5 percent to 32.51 per dollar, its biggest intraday decline since July 9, while Indonesia’s rupiah fell 0.4 percent to a one-month low of 16,400.
Taiwan’s dollar dropped more than 0.4 percent to its lowest point since July 1, and currencies across the region declined, with investors pondering over the implications for growth and inflation on the global economy from the tariffs.
Trump’s trade deal with Europe initially lifted market sentiment, but investors quickly realised the terms largely favoured the United States. This reinforced dollar strength, adding pressure on regional currencies.
Officials in Seoul are scrambling in an all-out push to clinch a trade deal ahead of the August 1 deadline to remove or reduce tariffs threatened by Trump against the country’s key industrial exports to the United States.
The urgency underscores a broader regional race to secure favourable terms after Vietnam, Indonesia, the Philippines and Japan already clinched trade agreements with Washington, creating a precedent for other Asian economies.
Meanwhile, US and Chinese economic leaders held more than five hours of talks in Stockholm on Monday, working to resolve disputes fuelling the economic conflict between the world’s two largest economies and extend their current truce by three months.
Regional equities fell alongside currencies, with Taiwan’s benchmark index slipping more than 1 percent to a one-week low. Singapore and the Philippine markets dropped more than 0.5 percent each, while Indonesian and South Korean shares bucked the trend, posting modest gains.
