Renminbi starts to lead the dance in Asean’s currency moves

[SINGAPORE] South-east Asia has long caught a cold when the US dollar sneezes, but these days, currency watchers are just as alert to the renminbi’s sniffles.

China’s renminbi is shaping up to be a barometer for the region’s currency swings as analysts point to deepening trade ties with China, US President Donald Trump’s volley of tariffs, and growing spillover effects from Beijing’s policy moves – all unfolding against a backdrop of weakening US dollar dominance.

While the greenback and renminbi have long played outsized roles in determining Asian foreign exchange movements, MUFG Bank’s senior currency analyst Michael Wan noted that even more domestic-oriented economies, such as Indonesia, are now reacting more visibly to the shifts in the renminbi – joining the ranks of traditionally sensitive currencies such as the Malaysian ringgit.