Most emerging Asian currencies weakened on Thursday, with the South Korean won sliding to a more than two-year low as concerns about an escalation in trade tensions ahead of crucial U.S.-China talks hit exporter currencies.Markets nervously await the start of two-day trade talks between U.S. and Chinese officials in Washington, due later in the day. President Donald Trump accused China of breaking the deal it had reached in trade talks, while Beijing announced it would retaliate if tariffs rise as planned on Friday. "Even if last moment developments lead to a postponement of escalation, the ill-will generated by this week’s developments will not go away. "Korea is strongly linked to China because of cross border trade, and the won is also a great indicator of trade in emerging Asia at large," Mahesh Sethuraman, Deputy Head of Sales Trading, Asia Pacific at Saxo Capital Markets said. "So, if the U.S.-China trade deal breaks down, it is very likely to have an adverse impact on emerging Asia trade at large, and therefore shorting Korean won is a good proxy for expressing that view.

Source: Economic Times May 09, 2019 07:52 UTC