Asia FX, dollar dip on Trump tariff jitters; Aussie slips ahead of RBA rate call

Published 07/07/2025, 05:00
© Reuters.

Investing.com-- Asian currencies and the dollar weakened on Monday as markets awaited clearer guidance on U.S. trade deals amid President Donald Trump’s shifting tariff deadline, while the Australian dollar led losses on expectations of a central bank rate cut.

The US Dollar Index, which measures the greenback against a basket of major currencies, fell 0.2% in Asia hours. Dollar Index Futures were also trading 0.1% lower.

Trump to start sending tariff letters; markets await details

President Trump said late Sunday that the U.S. will begin sending tariff letters to other countries at 12:00 p.m. ET (1600 GMT) on Monday.

He added that countries aligned with the BRICS bloc will face an additional 10% tariff over their allegedly anti-American practices.

Earlier in the weekend, Trump said the U.S. was nearing multiple trade agreements, with the new rates set to take effect on August 1.

In April, Trump introduced a base tariff of 10% on most nations, with extra duties reaching up to 50%. But he said on Friday that the tariff rates could go as high as 70%.

This three-week extension gives other countries more time to reach agreements with the U.S., but the lack of details kept investors nervous.

The South Korean won’s USD/KRW pair rose 0.4% on Monday.

The Thai baht’s USD/THB pair jumped 0.7% while the Malaysian ringgit’s USD/MYR gained 0.5%.

The Chinese yuan’s onshore pair USD/CNY edged up 0.1%, while the offshore USD/CNH pair rose 0.2%.

The Japanese yen’s USD/JPY and the Singapore dollar’s USD/SGD pair ticked 0.1% higher, each.

The Indian rupee’s USD/INR pair also gained 0.1%.

Aussie dollar slips on RBA rate cut expectations

The Australian dollar’s AUD/USD pair fell 0.5% on Monday, set for its third consecutive decline.

Markets are widely anticipating the Reserve Bank of Australia to cut rates by 25 basis points on Tuesday, potentially the central bank’s third rate cut this year.

"Persistent inflation is continuing to ease, while the global growth outlook remains uncertain. This gives the RBA another opportunity to lower rates next week," analysts at ING said in a recent note.

"A more dovish RBA can hinder AUD gains in the crosses, but AUD/USD remains primarily a US and tariffs story," they added.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.