Asian currencies fell to their lowest levels since May as tensions between China and the United States over trade escalated again, prompting caution among traders.
The Bloomberg Asia Dollar Spot Index fell as much as 0.2% to 91.51 on Monday, the lowest level since May 9. The export-sensitive New Taiwan dollar and South Korean won were the biggest decliners among Asian emerging currencies.
Previously, US President Donald Trump said on Friday that he would impose a 100% tariff on Chinese products starting from November 1 and impose export controls on key software. Previously, he said on Sunday that he was willing to reach an agreement with China.
Lloyd Chan, a strategist at Mitsubishi UFJ Bank, said, “Asian markets are in a risk-averse mood as Trump’s threat to impose a 100% tariff on China has reignited concerns over a further escalation of Sino-US trade tensions.”
He said: “Currencies closely related to China’s economic outlook and global trade, such as the South Korean won, the New Taiwan dollar and the Malaysian ringgit, may face some pressure.”
The MSCI Emerging Markets Currency Index fell for the fifth consecutive day. However, the offshore yuan rose as the People’s Bank of China set the strongest central parity rate since November last year.
Risk aversion spread beyond the currency market, with regional stock markets also experiencing a sharp decline. The MSCI Emerging Markets Index dropped by 2%, marking its biggest one-day fall since April.
Technical analysis:
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Gold: Last Friday, our plugin alerted us to buy low after the liquidity sweep in the yellow zone. However, due to Trump’s tweet, the price rose directly. We have updated the plugin alert for today. A green buy limit opportunity has already occurred once. Additionally, keep attempting long positions after the liquidity sweep in the two lower yellow zones. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
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Nasdaq: The green buy limit operation reminder last Friday failed due to Trump’s small essay. For the day, we continue to pay attention to the price’s repair behavior, and watch for the blue area’s buy stop attempt; meanwhile, keep the yellow area below for the long signal after the liquidity sweep. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
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Crude oil: The price was greatly affected by Trump’s small essay and once dropped to nearly 58. However, it started to stabilize and rebound from Monday. Within the day, it is necessary to wait for the confirmation of the pullback after the momentum breaks through before attempting to buy. Additionally, keep the low-buy signal near 58/58.50 after scanning for liquidity. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
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Today’s key economic data and events to focus on:
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