Asian FX rallies as USD weakens on recession fears, tariff uncertainty

Patricio Martín FXStreet

USD remains offered across the board as investor flows shift sharply into Asia, following a record 6% two-day surge in the Taiwan dollar (TWD) and strong gains in the Korean won (KRW), Chinese yuan, and Thai baht (THB). Markets are reassessing US asset exposure amid weakening U.S. growth and erratic trade policies, with the greenback under sustained pressure.

Asian selling continues, amplified by speculation that Taiwan and other regional economies may be allowing currency appreciation to ease trade tensions with Washington. The Singapore dollar (SGD) and Malaysian ringgit (MYR) have also firmed as capital pours into the region, defying the historical trend of FX depreciation as a shock absorber in trade disputes.

Nil news on tariffs, aside from the latest US levies targeting foreign filmmakers. However, the broader trade war rhetoric lingers, with analysts noting that Asia’s tolerance for currency strength may be shifting amid changing trade dynamics and rising intra-Asian commerce.

FOMC due Wednesday, with markets watching for signals of rate cuts later this year. Bank of England meets Thursday, likely to stay on hold, but the focus will be on forward guidance as the global central bank divergence narrative deepens.

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

GBP/USD loses momentum, flirts with 1.3200

GBP/USD is struggling to maintain its positive bias on Thursday, retreating toward the 1.3200 region in response to the pick in the buying interest around the Greenback. That said, Cable remains under scrutiny as cautious market sentiment keeps investors focused on the US-Iran conflict and political effervescence in the UK.

EUR/USD trims gains, challenges 1.1400

EUR/USD now gives away part of its earlier advance, receding toward the 1.1400 contention zone on Thursday. Meanwhile, the pair’s recovery comes amid extra losses in the US Dollar, at the time when while investors continue to monitor developments in the Middle East and sentiment surrounding global technology stocks.

Gold remains bid and close to $4,100

Gold accelerates its recovery and approaches the key $4,000 mark per troy ounce at the end of the week, adding to Thursday’s advance. However, expectations for a hawkish Fed remain steady and keep the yellow metal’s potential upside contained.

Crypto Today: Bitcoin at $60,000, Ethereum at $1,500, and XRP at $1 face a make-or-break test

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are trading in the red on Friday after three consecutive days of losses, testing their respective make-or-break support levels.

Week ahead – NFP report to challenge Dollar strength and the hawkish Fed

Dollar strength dominates markets, as the hawkish Fed overshadows geopolitics and lower oil prices. NFP week could drive September Fed hike expectations and boost market volatility. The euro lacks fresh bullish catalysts, all eyes on the preliminary inflation report and the ECB Forum.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.