Asia’s emerging currencies have have been hit hard by a wave of selling as financial markets bet on the prospect of Donald Trump pursuing protectionist trade policies.



Despite stocks closing at an all-time high on Wall Street, investors across Asia turned cautious on Friday on fears that Trump could stifle access to the world’s biggest economy and that his expansionist fiscal plans could fire inflation at home and higher US interest rates.

The greenback almost hit 107 yen for the first time since July in US trade and it maintained most of the gains in Asia, sitting at 106.62 yen – well up from the 101.20 yen touched in the initial panic of Trump’s win.

It also surged against other currencies across Asia Pacific. The Indonesian rupiah plunged more than 5%, prompting the central bank to intervene, while the Australian dollar was down 2% and Malaysia’s ringgit lost 1%.

Yuan headed for steepest weekly fall since Jan to a 6-year low, close to post-2008 peg. USD index at 8-month high, EM currencies are hurting pic.twitter.com/kyen56nG3i — Haidi Lun 伦海迪 (@HaidiLun) November 11, 2016

China fixed its yuan reference rate beyond 6.8 against the dollar for the first time in more than six years, with analysts warning the unit could drop further raising more concerns about currency wars.



The South Korean won was 1.6% lower after the country’s central bank held interest rates at record lows.

Across the Pacific, the Mexican peso fell back towards record lows on worries about the Trump’s anti-Mexico stance. The dollar was also up 3.3% at 20.64 Mexican pesos, close to its all-time highs.

After an initial shock, global equities rocketed on news Trump had beaten Hillary Clinton, with investors hoping for business-friendly policies and measures to boost the US economy, a key driver of world growth.



THIS is your currency to watch today. Indonesian Rupiah weakens most in over 3 years. (yes that's a 1-day move on the chart) pic.twitter.com/Qds4w0Ck2Q — David Ingles (@DavidInglesTV) November 11, 2016

However, there are worries about his plans after saying he will tear up several trade deals while ramping up import duties.

And expectations that Trump’s plans for huge spending projects will fan prices have lit a fire under the dollar as dealers bet the Federal Reserve will hike borrowing costs more aggressively to keep prices under control.

That in turn has led to fears of huge capital outflows from Asia Pacific as investors go back to the US for better, safer returns.

- Ringgit, won tumble

- Global bonds selloff

- Oil swings to losses

- Emerging stocks drophttps://t.co/sH6KUENLNh pic.twitter.com/tiNHvMPmXL — Bloomberg Australia (@BloombergAU) November 11, 2016

The peso – as well as the Mexican stock market – has been hammered by fears Trump will follow through on campaign pledges to renegotiate the North American Free Trade Agreement (NAFTA), as well as pressure the country to pay billions of dollars for a giant border wall.

“The dollar is up against most major currencies supported by an upward revision to US interest expectations and focus on Trump’s pro-growth and inflationary economic policies,” Elias Haddad, a senior currency strategist at Commonwealth Bank of Australia, told Bloomberg News.

“Trump’s economic policies will force the Fed to raise the funds rate at a faster pace than otherwise, which [will push the dollar up].”

On equities markets, investors sent Hong Kong 1.5% lower and Seoul 0.9% down, while Taipei, Manila and Jakarta were all down around 2%.

The Nikkei in Japan bucked the trend as the weaker yen boosted exporters, although it was down from earlier highs. The CSi300 in Shanghai was up 0.2% and Australia’s ASX/S&P200 put on 0.3%.

Oil prices fell in early trading on Friday, as the market refocused on a persistent supply overhang that is not expected to abate unless Opec and other producers make a significant cut to their output.

Brent crude futures were trading at $45.74 per barrel at 0445 GMT, down 10c, or 0.2%, from their last close.

Copper, in contrast, soared 5% to a 16-month high as speculation that US infrastructure spending could jump under a Republican administration unleashed a wave of interest in industrial metals.

Zinc hit a five-and-a-half-year peak and nickel was at its highest since July 2015.

