Asia FX moves little with focus on US-China trade, dollar steadies ahead of CPI

Published 11/08/2025, 04:22
© Reuters.

Investing.com-- Most Asian currencies kept to a tight range on Monday with focus squarely on a looming deadline for a U.S.-China trade deal, while the dollar steadied ahead of key inflation data due this week.

Regional markets took negative cues from weak Chinese inflation data released over the weekend, which highlighted sustained pressure on Asia’s biggest economy. Trading volumes in the region were also quashed by a holiday in Japan. 

U.S. trade tariffs remained the biggest point of focus, after they took effect against a slew of major economies from last week. Focus was also on upcoming talks between Russia and the U.S. this week, which could help determine tariff levels for India and China. 

Chinese yuan flat after weak inflation; US trade talks in focus 

The Chinese yuan’s USDCNY pair moved little on Monday, after data released over the weekend showed deflation remained largely in play in July. 

Chinese consumer price index inflation was flat, while producer price index inflation shrank more than expected. The print highlighted fading support from Beijing’s recent stimulus measures, while a trade truce with Washington also offered limited relief. 

U.S.-China trade relations came into renewed focus this week before an August 12 deadline for a permanent trade truce between the two countries. 

Washington and Beijing had agreed to temporarily lower their respective trade tariffs earlier this year, and were seen working towards a more permanent trade deal, with President Donald Trump setting an August 12 deadline for an agreement. 

Trump signaled last week that he was likely to extend this deadline, with dialogue between the world’s biggest economies set to continue. 

Uncertainty over U.S. trade and China provided middling cues to regional currencies. The Japanese yen’s USDJPY pair fell 0.1% in thin trade, while the Singapore dollar’s USDSGD pair fell 0.1%. 

The South Korean won’s USDKRW pair fell 0.2%, while the Taiwan dollar’s USDTWD pair fell 0.1%.

The Indian rupee’s USDINR pair rose slightly and remained in sight of record highs hit last week, as sentiment towards India was battered by Trump imposing up to 50% tariffs on New Delhi over its buying of Russian oil.

Trump had also threatened similar duties on China. The U.S. president is set to meet his Russian counterpart Vladimir Putin on Friday to discuss an end to the Ukraine war.

The Australian dollar’s AUDUSD pair fell slightly before a Reserve Bank of Australia meeting on Tuesday, where the central bank is widely expected to cut interest rates after a surprise hold in July. 

Dollar steady with CPI inflation on tap

The dollar index and dollar index futures moved little on Monday after logging steep losses in the past week. 

Focus was squarely on upcoming CPI inflation data for July, due on Tuesday, for more cues on the economy and interest rates.

The CPI data comes amid increasing bets that the Federal Reserve will cut interest rates in September, following a series of weak labor market prints in recent months. Markets will be looking for a similar cooling in inflation, although analysts and central bankers have warned that Trump’s tariffs are expected to boost inflation.

 

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