Today's Edition
Hong Kong (AFP)
The dollar rose in Asia on Tuesday fuelled by hopes for trade deals to avert Donald Trump's sweeping tariffs, while equities mostly rose as investors await the Federal Reserve's latest policy decision.
Oil also staged a comeback after tanking on news of an output hike by key producers that came despite growing concerns about demand and the outlook for the global economy.
While no agreements have yet been reached with the White House, there is optimism that governments are making progress in averting or tempering the US president's eye-watering levies, which have sent shivers through world markets.
Sentiment was given a lift by US Treasury Secretary Scott Bessent, who told CNBC that the administration had been approached by 17 countries and offered "very good" trade proposals.
He also said there could be "substantial progress in the coming weeks" with China, which has been hit with tariffs of 145%.
Trump has imposed lower duties of 10% on goods from most other countries, along with 25% levies on specific items like steel, automobiles and aluminium.
Hopes for deals have seen Asian currencies rally against the dollar, with South Korea's won, the Malaysian ringgit, Indian rupee and Thai baht seeing healthy gains.
The gains have led some to speculate governments are allowing for an appreciation of their currencies as part of negotiations with Washington.
Equities mostly rose, with Shanghai leading the way as investors returned from a long weekend.
Wellington, Taipei, Manila and Jakarta also rose, though Sydney and Singapore edged down.
Traders brushed off losses on Wall Street, with the S&P 500 snapping a nine-day winning streak, with film studios hit by Trump's warning of new tariffs on all films made outside the United States.
Focus turns to the Fed's policy announcement Wednesday, with expectations it will stand pat on interest rates, even as Trump continues to push for more cuts.
While data last week showed that the US economy contracted in the first quarter, strong jobs and services sector figures suggest there is still some resilience.
"Soft data had baked in a Fed pivot, but the ensuing hard data prints got bond desks slashing their rate-cut tickets," said SPI Asset Management's Stephen Innes.
"So long as the real economy hums and fresh levies are expected to spark a second inflation wave, Powell's hawkish brace stays locked in," he said in reference to Fed chairman Jerome Powell.
Oil prices rose more than one percent after sinking around two percent on Monday following the decision by Saudi Arabia, Russia and six other members of the OPEC+ cartel to boost output by 411,000 barrels a day for June, a month after a similar move had already caused prices to fall.
Gold prices touched a one-week high on safe-haven demand.
