(Bloomberg) — The South Korean won led most emerging-Asian currencies higher as the dollar slid after Germany’s conservative opposition leader won Sunday’s federal election.
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The Korean won and the Malaysian ringgit rose by 0.5% each on Monday. Other emerging market currencies like the Polish zloty and the Romanian leu also advanced. Stocks traded lower as US President Donald Trump restricted Chinese spending on some strategic US sectors.
The dollar fell as the euro gained after Germany’s conservative opposition leader Friedrich Merz said he’ll move quickly to form a new government after he won Sunday’s federal election.
It’s the global factors, including the German elections, raising some expectations for looser fiscal policy in Europe’s largest economy, supporting EM currencies, said Michael Wan, senior currency analyst at MUFG Bank Ltd. That’s helping EM currencies, he said.
Emerging market currencies have been supported in recent days as US President Donald Trump has shown an inclination to negotiate on tariffs.
“Markets are right now underpricing tariff risks and being somewhat complacent about the multitude of tariffs that Trump 2.0 could put out over the next few months,” said Wan.
Read: Dollar Reprieve Brings Global Funds Back to Emerging-Asia Stocks
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