Investing.com –Asian currencies declined on Friday, led by sharp losses in the South Korean won and Malaysian ringgit, as markets were rattled by fresh tariff threats from U.S. President Donald Trump, while the Japanese yen remained steady following strong inflation data from Tokyo.
Trump threatened that he would impose significant trade tariffs on BRICS nations should the bloc pursue plans to develop a common currency aimed at reducing reliance on the U.S. dollar.
The US Dollar Index was marginally higher in Asian trading hours on Friday, while Dollar Index Futures rose 0.4%.
The greenback was supported by expectations of slower rate cuts in 2025, and the lingering impact of Trump’s tariff policies.
Trump’s tariff threat sparks risk-off mood, Asia FX tumbles
Trump’s proposal to impose steep tariffs rattled markets, particularly export-reliant economies.
The South Korean won tumbled 0.8% against the U.S. dollar on Friday, with the USD/KRW pair set to rise nearly 2% for the week.
The Malaysian ringgit’s USD/MYR pair jumped 0.8%, and was on track for a 1% weekly gain.
Trump on Thursday reiterated his intention to implement a 25% tariff on imports from Canada and Mexico starting this Saturday, with potential additional tariffs on Chinese goods.
Additionally, he threatened that the BRICS bloc, which consists of Brazil, Russia, India, China, South Africa, and others, could face “100% tariffs” if they move away from the dollar.
Earlier in the week, the U.S. Federal Reserve held rates unchanged and indicated that the policy would remain restrictive until inflation is fully tamed.
