Tariff relief provides an alka-seltzer moment in Asia

Asian markets took a bullish cue from the “Trump Put,” bouncing after the administration hit the brakes on tariffs for Canada and Mexico. The Hang Seng Index jumped as much as 2.9%, fueled by speculation that Beijing could roll out fresh stimulus measures at today’s joint press conference from key government ministries.

In a move that underscores China’s determination to hit its ambitious growth targets despite trade headwinds, officials set an expansion goal of 5% for 2025—marking the first time in over a decade that Beijing has held the same target for three consecutive years. The National People’s Congress (NPC) also emphasized technology innovation and domestic consumption, a theme that has propped up market sentiment, particularly in AI stocks, thanks to DeepSeek’s latest advancements.

Over in FX land, currency markets are taking a breather after the euro’s explosive rally over the past 24 hours. According to the tea leaves, however, EUR/USD appears to be flirting with the idea of finding a home base near 1.1000, So, there is no apparent reason to fade the move at this time. Of course, any fresh tariff threats from Trump aimed at the EU could trigger a knee-jerk selloff, but at this point, that would likely offer an even better level to reload euro longs.

The almighty U.S. dollar’s safe-haven status just took a gut punch—and judging by the price action, it might struggle to get off the mat anytime soon.

Whether it’s the growing U.S. economic slowdown, the tariff-induced uncertainty, or simply the realization that erratic policymaking might be here to stay, traders are starting to diversify away from the dollar.

For now, the greenback looks wobbly, and unless the US economy shifts gears in a way that catches markets off guard, the path of least resistance might be lower.

Meanwhile, the broad dollar selloff in Asia is still in play, pushing regional currencies higher. With traders paring long-dollar positions, expect further strength in Asian FX.

On the local front, the Bank Negara Malaysia (BNM) is firmly in wait-and-see mode. The central bank is expected to keep its policy rate unchanged at 3.00% later today, as inflation remains contained and economic growth is holding steady. For now, stability is the game's name—but with global policy winds shifting, traders are keeping a close eye on the guidance.