Bloomberg’s gauge of Asian currencies hit a six-month high, with Taiwan’s dollar surging more than 2% in opening trades to the strongest level in over two years. Meanwhile, Malaysia’s ringgit advanced to its strongest since October. MSCI’s index of emerging market equities also gained.
The rally in regional stocks and currencies comes after President Donald Trump suggested the US may strike trade deals with some countries as soon as this week, offering the prospect of relief for trading partners.
“Trade de-escalation is broadly positive on Asia FX as markets may feel more confident to buy the dip in the Asian assets that have been hammered due to Trump 2.0,” said Peter Chia, a strategist at United Overseas Bank Ltd. “At the same time, it is worth noting that until trade deals are announced, Asia FX may stay volatile.”
While the stiff tariffs announced by the Trump administration in early April roiled financial markets, they’ve since steadied amid signs that talks with Asian nations are progressing and trade tensions between China and the US are thawing.
Underscoring the positive shift in sentiment is the huge turnover in Asian options and non-deliverable forwards. The South Korean won and Taiwan dollar ranked high among such contracts on Monday for a second session running, data compiled by Bloomberg show. That followed high turnover in Asian options and non-deliverable forwards going into the weekend. Markets in Hong Kong and mainland China were closed for a holiday on Monday.
