BENGALURU: The Taiwan dollar jumped to a more than three-year high on Friday on a weaker greenback, while other emerging Asian currencies were steady and equities mixed as investors exercised caution ahead of looming US tariff deadlines.
Taiwan’s currency hit its strongest level since early-April 2022 at 28.919 per US dollar, bucking the broader trend.
Traders attributed the currency’s ascent to expectations of Federal Reserve rate cuts, a weaker US dollar, and the continued flow of foreign capital into the island.
The currencies of other developing Asian nations were largely steady. The Thai baht slipped 0.1% and the South Korean won dropped 0.5% but logged its best week since June 2. The Philippine peso was up 0.2%.
The dollar inched lower against a basket of currencies, as markets priced in deeper US rate cuts. Speculation that President Donald Trump could name a more dovish successor to Fed Chair Jerome Powell also added to the expectations.
Investors will closely watch the US Personal Consumption Expenditures (PCE) index data - the Fed’s preferred inflation gauge - due later in the day, for rate cues.
“Combination of the “sell USD” trade, consistent stronger Chinese yuan fix seen over the last few sessions and geopolitical de-escalation...can continue to fuel the rally in Asia excluding Japan,” OCBC currency strategist Christopher Wong said. Equities in emerging Asia were mixed as investors turned their attention to progress in trade talks ahead of the July 9 deadline for Trump’s reciprocal tariffs.
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