Due to concerns about tariffs, Asia FX is weak, and the dollar is near a 3-month low due to weak data.

On Wednesday, the majority of Asian currencies traded within a narrow range after the U.S. The dollar fell to a 11-week low as concerns about a slowing U.S. economy grew, and President Donald Trump reiterated his threat of additional trade tariffs. Due to traders remaining largely risk-averse following Trump’s threats, regional currencies took little advantage of a weaker dollar. The U.S. President recently also outlined plans for more trade restrictions on China, which could draw retaliation from Beijing and spark a renewed global trade war.
The USD/CNY pair rose 0.1%, indicating that the Chinese yuan remained weak. The USD/JPY pair rose 0.3 percent, indicating a slight weakening of the Japanese yen, which had benefited greatly from increased demand for safe havens and expectations of higher interest rates in recent sessions. However, on Tuesday, the pair had fallen to a low of more than four months. The dollar rises from its near-three-month low, despite growing concerns. After falling to their lowest level since early December on Tuesday, the dollar index and dollar index futures gained a small amount in Asian trade. The greenback was battered by softer-than-expected consumer confidence data for February, which ramped up concerns over slowing private consumption. Trump’s tariffs, persistent inflation, and rising food costs all put pressure on private spending, which is a major economic engine in the United States. Traders bet that the U.S. economy will slow down, which will push the Federal Reserve to cut interest rates more, which is bad news for the dollar. Treasury yields also sank on this notion, with Trump’s tariff threats- which tend to benefit the dollar- doing little to support the greenback. About two weeks after he imposed tariffs on steel and aluminum imports, Trump signed an executive order to look into imposing tariffs on copper imports. This week, data on the fourth-quarter gross domestic product and the PCE price index—the Fed’s preferred inflation gauge—are the primary sources of information regarding the U.S. economy. The Australian dollar falls as CPI falls below expectations. The consumer price index inflation reading for January was lower than anticipated, indicating that headline inflation remained stable from the previous month. This resulted in a decline in the Australian dollar on Wednesday. The AUD/USD pair fell 0.3%.
However, as underlying CPI inflation rose and was close to surpassing the Reserve Bank of Australia’s target range of 2% to 3%, further losses in the Australian dollar were limited. While the central bank had cut interest rates earlier in February, it had warned that further easing would be contingent on softer inflation.
Broader Asian currencies moved in a tight range, as relief from a softer dollar was largely offset by fears of more trade tariffs and a slowing U.S. economy.
The USD/SGD pair increased by 0.2 percent, while the USD/KRW pair decreased by 0.1 percent for the South Korean won. After returning above the 87 rupee level this week, the USD/INR pair of the Indian rupee has stabilized.