Most Asian currencies eased on Wednesday as risk sentiment was curbed ahead of the signing of the Phase 1 Sino-US trade deal after comments from Washington that tariffs would remain in place for now.
Treasury Secretary Steven Mnuchin late on Tuesday said that the United States would keep in place its tariffs on Chinese goods until the completion of a second phase trade agreement.
The yuan retreated 0.2 percent to 6.895 a dollar and was set to snap six straight sessions of gains.
Markets were reminded of the longer-term structural points of contention in US-China relationship, Maybank analysts said in a note, adding that “euphoria related to the trade deal signing could hence be capped”.
Meanwhile, China’s central bank injected $58 million in loans on Wednesday, as its aims to maintain liquidity in a slowing economy and ease a potential crunch ahead of the Lunar New Year.
The trade-sensitive South Korean won slipped as much as 0.6 percent to 1,162.80 per dollar.
A Reuters poll showed that Bank of Korea is likely to keep rates on hold at 1.25 percent during its policy meeting on Friday, due to signs of economic recovery.
However, South Korea’s economy has been among the worst-hit by global supply chain disruptions from the trade war and analysts believe that any further uncertainties in its growth outlook could see the central bank cutting rates again this year.
Indonesia’s rupiah softened 0.3 percent even as data showed the country’s trade deficit narrowed in December, following its largest trade gap in seven months in the prior month.
The stable trade figures comes days after the central bank said it would let the rupiah strengthen in line with market movements.
The Malaysian ringgit, the Singapore dollar and the Indian rupee edged lower. — Reuters
