As holiday-thinned volumes swept through Asian markets on Monday, most regional currencies traded in tight ranges. Persistent uncertainty surrounding U.S. tariffs and U.S.–China trade relations weighed on overall sentiment, while an unexpected election result in Australia offered a jolt to the Australian dollar.

Market Overview: Trade Concerns and Limited Liquidity

Global investors are approaching the next phase of U.S.–China tariff discussions with caution. President Trump’s recent comments—indicating no immediate plans to engage with President Xi—have reignited fears regarding potential escalated duties on Chinese imports. Additionally, market holidays in China, Japan, and other countries have restricted liquidity, amplifying even slight movements in major currency pairs.

Currency Observations

Japanese Yen (USD/JPY Drop 0.5%)

Following a sharp sell-off last week, the yen staged a modest recovery as risk aversion increased. With Tokyo markets closed for a holiday, dollar exhaustion primarily fueled this movement.

South Korean Won (USD/KRW Rise 0.1%)

The won dipped slightly against a broadly weaker U.S. dollar, reflecting South Korea’s export vulnerability to Chinese demand and ongoing U.S. trade strategies.

Singapore Dollar (USD/SGD Drop 0.3%)

The Singapore dollar saw support from safe-haven inflows and dropping U.S. Treasury yields, allowing it to outperform its U.S. counterparts.

Taiwan Dollar (USD/TWD Decline 3.2%)

In a notable development, the Taiwan dollar appreciated following optimistic remarks regarding potential developments in U.S.–China trade discussions, boosting confidence in the heavily export-driven economy.

Offshore Chinese Yuan (USD/CNH Stable)

While remaining steady in Asia, the yuan continues to hover near recent lows as China expressed readiness to engage in sincerity-based trade discussions.

Australian Dollar Gains from Election Outcome

The AUD/USD pair rose by 0.3% after Australia’s Labor Party secured a historic second term under Prime Minister Anthony Albanese. Investors now anticipate sustained fiscal support and a consistent policy approach ahead of the Reserve Bank of Australia meeting, where rates are expected to be held steady. To keep track of decisions, monitor the timing of the RBA’s announcements for necessary insights.

Dollar Index Retreats

The ICE U.S. Dollar Index and futures declined by 0.3% in Asia, retreating from the prior week’s 0.5% gain. Friday’s better-than-expected nonfarm payroll numbers had previously underpinned the dollar; however, mixed messages from trade talks and the Fed’s cautious guidance have left the greenback in a range-bound state.

Staying Informed with Real-Time Data

Traders can access timely updates on intraday movements across Asian currencies through relevant APIs, ensuring they stay ahead in these thin, holiday-affected markets.

Looking Ahead

• U.S.–China Trade Discussions: Any shifts toward genuine dialogue are likely to cause renewed FX volatility, particularly affecting yuan-linked pairs.

• Federal Reserve Policy Indications: As the Fed meeting approaches, updates on interest rate strategies will significantly influence the dollar and carry trades.

• Resumption of Regional Liquidity: As markets reopen across Asia, expect wider ranges and spillover effects across asset classes.

By combining analysis driven by events with real-time data, currency strategists can optimize their trading entries and exits, whether seeking safe haven coverage or positioning for growth-oriented rallies.