Emerging currencies drop as risk aversion grows, led by Thai baht

Asian currencies, led by the Thai baht, weakened alongside stocks as investors pulled back from riskier assets. A key index of Asian currencies saw its biggest drop in over a week, while emerging market stocks also declined.

China and Hong Kong equities fell after data revealed China’s consumer inflation dipped below zero for the first time in over a year. “China equities lower today” are pressuring Asian currencies against the dollar, said Barclays strategist Lemon Zhang.

 

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Meanwhile, US Treasury gains signaled growing concerns about a slowdown in the US economy, fueled by tariff hikes and potential federal layoffs.

In contrast, Eastern European currencies like the Czech koruna held steady, while Romania’s election commission banned far-right candidate Calin Georgescu, sparking protests and drawing international scrutiny.