The second source of uncertainty is the possibility of more aggressive action on Chinese exports to the US. The introduction of anything close to that would generate downward pressure on the renminbi, given the resulting reduction in demand for Chinese exports. This slippage would likely offset any direct increase in these countries' exports to the US, at least in the short and medium term, because re-organising production chains is not a trivial matter. Higher commodity prices, triggered in part by anticipation of increased demand as a result of a boost in US infrastructure spending, could cause these countries' currencies to strengthen. The challenges that US policy changes pose for emerging-market currencies include not only downward pressure, but also greater volatility.

Source: Bangkok Post March 12, 2017 22:31 UTC