Asian currencies mostly traded sideways on the last trading day of 2024, influenced by concerns about US tariffs and a strengthening US dollar. The Taiwan dollar and Indonesian rupiah are set to record their worst yearly declines since 2022.
MOST Asian currencies were largely muted on the last trading day of a torrid 2024 year, as the threat of US tariffs and a strong dollar boosted by prospects of fewer US rate cuts next year took the shine off risky Asian assets.The Taiwan dollar and the Indonesian rupiah inched lower on Tuesday and were both set to post their worst yearly declines since 2022.
South Korean markets were closed on Tuesday, but were the worst performer in Asia this year as the government's efforts to boost the market were overshadowed by signs of a slowdown in exports and domestic political turmoil.The won dropped 12.5 percent this year, its biggest decline since 2008, while shares in Seoul declined over 9 percent for the year.The Malaysian ringgit edged 0.1 percent lower but posted an annual gain of 2.8 percent for the year in what could be its best year since 2017.Markets are now bracing for US President-elect Donald Trump's policies around tax cuts, tariff hikes and tighter immigration, which will likely put upward pressure on prices, bond yields and the dollar, and undermine the currencies of trading partners.Moreover, the possibility of US rates staying higher for longer has also raised the risk of stark interest rate differentials between the US and emerging economies spurring capital outflows.'For Asian FX, the fog of tariffs weigh on sentiments. The currencies that are highly sensitive to market developments such as a weaker RMB (yuan), or Fed slowing rate cuts will come under more pressure,' said Christopher Wong, an FX strategist at OCBC.Wong said the South Korean won, the Chinese yuan and the Japanese yen were among those in Asia that may remain weak going into 2025 while other currencies less sensitive to moves in the yuan such as the Indonesian rupiah and the Philippine peso may be relatively more resilient.MSCI's gauge for emerging market stocks edged 0.2 percent lower on the day, but was set to end the year 5-percent up.Most regional stock markets were up for the yea
Asian Currencies US Tariffs Strong Dollar Emerging Markets 2024 Year-End
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