Ringgit, rupiah weaken
US President Donald Trump's threat of an extra 10% tariff on countries aligning with the 'anti-American policies' of the BRICS group, as well as sending letters to partners threatening about restoring April 2 tariffs exacerbated the risk-averse sentiment.
BRICS is a group of emerging economies comprising Brazil, Russia, India and China, with Egypt, Ethiopia, Indonesia, Iran, and the United Arab Emirates included as members last year.
The Indian rupee hit a seven-session low on the day, while its Nifty 50 drifted lower. Thailand's baht
slipped 0.7% to its weakest in four sessions, while South Korea's won, the Philippine peso, and the Malaysian ringgit hovered near multi-session lows. An MSCI index tracking emerging market currencies fell 0.3%. The US dollar index nudged higher to 97.219 in Asia afternoon trade, though it remained pinned around multi-year lows against the euro and the Swiss franc.
Asian countries, heavily dependent on imports from China and US investments and businesses, are caught in an escalating trade war between the world's top two economies.
They 'face an increasingly complex balancing act between maintaining US market access and Chinese investment flows, complicated by heavy dependence on Chinese intermediate goods and insufficient local supply chain alternatives,' analysts at Nomura wrote.
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