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Most Asian currencies range-bound, focus on new U.S. tariff deadline

Monday,   09-Dec-2019   12:38 PM (IST)

Most Asian currencies remained range-bound on Monday, as investors awaited trade talk developments ahead of the scheduled implementation of new tariffs by the United States on Chinese imports. The United States is set to impose a new round of trade tariffs on Chinese goods on Dec. 15, a plan which White House economic adviser Larry Kudlow said on Friday was still in place. With the deadline for new tariffs drawing near, investors fear that if Beijing and Washington fail to agree upon a "phase 1" trade deal, the new tariffs could further escalate the bruising, 17-month long trade war between the two countries. The trade war continues to weigh on the Chinese economy with China's exports shrinking for the fourth consecutive month in November. On the other hand, strong U.S. jobs data allayed fears that the prolonged trade tiff had stalled growth in world's largest economy, supporting the greenback. While most Asian currencies remained restrained, the Indonesian rupiah firmed the most in the region with a 0.1% gain, strengthening for a third consecutive session. The Taiwan dollar strengthened 0.1% ahead of its November trade data. Meanwhile, the Indian rupee strengthened 0.1% on the back of corporate inflows. Taiwan has seen a recovery in growth ever since manufacturers relocated back to the island from China to avoid higher tariffs in light of the trade war. The economy grew near 3% in the third quarter from a year earlier. Last month, the central bank also raised its 2019 economic growth forecast to 2.64% from 2.46%. Meanwhile, the uptick in global demand for electronics is also expected to boost the island's exports in 2020. Taiwan's exports are likely to have rebounded in November after two months of falls, according to a Reuters poll.