BENGALURU: The Thai baht and the Malaysian ringgit led most Asian currencies higher on Thursday, as the dollar eased after a two-session rally, although fears of US President Donald Trump’s tariffs kept gains in check.
Trump said on Wednesday that he will announce tariffs related to imports of timber, cars, semiconductors and pharmaceuticals “over the next month or sooner”.
A trade dispute between the US and its major partners, particularly China, Southeast Asia’s largest trading partner, could negatively impact economic growth and markets, prompting investors to factor this risk into their portfolios.
The Thai baht and the ringgit rose 0.3% each, while the won advanced 0.3% to its highest point since January 24.
The US dollar index, which tracks the currency against six major counterparts, fell marginally by 0.2% to 106.97 after rising in the past two sessions.
Equity markets in the region declined following the release of minutes on Wednesday from the US Federal Reserve’s January 28-29 policy meeting, which revealed officials’ concerns over the inflationary effects of Trump’s policies.
Thai stocks, the worst performers in the region so far this year, lost 0.5%.
Shares in Philippines dropped nearly 1%, with property developer Ayala Land leading declines.
Malaysian stocks inched 0.4% lower, while those in Singapore and Indonesia traded flat.
After an unexpected 25 basis-point rate reduction in January, Bank Indonesia (BI) held rates steady as anticipated, while signalling the possibility of further rate cuts.
“We maintain our view that monetary policy is likely to do more of the heavy lifting in supporting growth this year as the government’s focus remains on fiscal consolidation,” Radhika Rao, a senior economist with DBS Bank, said in a note.
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