BENGALURU- South Korea’s won and Malaysia’s ringgit fell most among broadly weaker Asian currencies on Friday, as investors assessed the possibility of new tariffs on Canada, Mexico and possibly China under US President Donald Trump.
The won dropped 1.4 percent, while the ringgit slipped 1.4 percent in its sharpest one-day drop since early November.
The Indonesian rupiah fell 0.3 percent and the Indian rupee slipped to an all-time low, with traders suggesting the Reserve Bank of India (RBI) probably stepped in to support the currency.
The dollar index firmed a day ahead of when Trump has threatened to impose 25 percent tariffs on imports from Canada and Mexico.
Trump also said he was still considering new tariffs on Chinese goods, citing its part in the fentanyl trade.
Mexico, Canada and China are the United States’ three largest trading partners, accounting for more than $2.1 trillion in annual imports and exports.
The Mexican peso last traded 0.3 percent higher, after a 1 percent fall in a volatile session on Thursday, while the Canadian dollar languished near a five-year low.
Markets in China and Taiwan were closed for the Lunar New Year holidays.
Analysts at Barclays believe the tariff threats to emerging markets currencies are “merely delayed”.
“Many Asian currencies have outperformed, suggesting risks of relatively more risk of weakness should tariff threats intensify against China,” they said in a report.
The analysts see scope for the Thai baht and the Philippine peso to depreciate further.
They also see risks to the won, ringgit and the Singapore dollar given their vulnerability to sectoral tariffs and high direct and indirect export shares to the US
Regional equity markets were mixed, with shares in Seoul dropped 0.8 percent on reopening post a four-day holiday break.