Asian currencies: Taiwan dollar, South Korean won lead gains

BENGALURU: The South Korean won and the Taiwan dollar led Asian currencies higher on Thursday, as the US-China trade truce and indications that President Donald Trump might take a milder approach in tariff negotiations lifted overall risk sentiment.

The won rose 0.9%, while the Taiwanese dollar

advanced more than 1% to reach its highest level since early May.

A forex trader in Taiwan told Reuters that foreign investors had been continuously selling the US dollar, and there was no obvious sign of central bank intervention in the market until late morning.

A second trader said the central bank was deliberately letting the Taiwanese dollar appreciate first, before stepping in.

Investor focus this week remained on trade talks between Washington and Beijing, which concluded with a framework deal that would lift Chinese export curbs on rare earth minerals and restore access for Chinese students to US universities.

“Relief from the fact that both countries have managed to reach an agreement following their talks earlier in the week has been more or less priced in by markets, which has made the US dollar continue to weaken, helping Asian currencies,” said Khoon Goh, head of Asia research at ANZ.

The dollar index dipped 0.1%, pressured by a weak US inflation print that fuelled bets on a Federal Reserve rate cut as early as September.

Meanwhile, Trump said he may extend the July 8 trade talks deadline and that the US also plans to send trade deal terms to several countries within one to two weeks.

Other regional currencies were also broadly higher with the Malaysian ringgit and Thai baht both up 0.3%.