Asian Currencies Weaken as Trump Tariffs Fuel Inflation Fears

Asian currencies weakened against the US dollar on Friday after President Donald Trump's new tariffs on imports from 60 trading partners took effect, pushing Treasury yields higher and fueling inflation concerns.

The US benchmark Treasury yield climbed to fresh multi-month highs overnight, with investors worried that higher import costs and energy prices could keep the Federal Reserve cautious on monetary easing when it meets next week.

The dollar index hovered near a three-week high against a basket of currencies as investors looked ahead to the Fed's meeting.

OCBC said foreign exchange markets had remained remarkably subdued despite rising geopolitical risks and oil prices, but warned that a sustained oil shock could quickly revive market volatility and underpin a broader US dollar rally.