Some of emerging Asia’s biggest central banks look to be dialling back their interventions in the currency market.
The threat of being labelled a currency manipulator by the US, especially during this period of tariff negotiations, will act as a deterrent
“The threat of being labelled a currency manipulator by the US, especially during this period of tariff negotiations, will act as a deterrent to further heavy FX intervention in local markets,” said Rajeev De Mello, a Geneva-based portfolio manager at GAMA Asset Management.
The shifting approach of Asia’s central banks to defending their currencies reinforces the sweeping changes in global markets since the election of Trump, whose on-again, off-again tariff threats have roiled asset prices and raised once unthinkable questions about the US dollar’s place in the global trading system.
South Korea confirmed last month that it had held currency talks with the US, sending the won higher amid talk that Trump wants a weaker dollar. But White House chief economist Stephen Miran has denied the idea Washington is working on secret deals to depreciate the dollar, saying the US continues to have a strong dollar policy.
The US dollar has plummeted against major currencies this year, suffering drops of around 10 per cent against the euro and the Swiss franc.
