Trump's pressure on the Fed weakened the dollar, while trade tensions caused the yuan to fall.

On Tuesday,Which foreign exchange platform is formal? influenced by Trump's push for reforms in the Federal Reserve, the dollar continued hovering near a three-year low during Asian trading, leading to an increase in most Asian currencies. Meanwhile, the RMB slightly declined due to U.S.-China trade tensions. The U.S. dollar index, which measures the dollar against a basket of major currencies, fell 0.1% during the Asian session, following a plunge of over 1% on Monday, marking the lowest level since March 2022.

Trump expressed to White House Economic Advisor Kevin Hassett that the possibility of dismissing Federal Reserve Chair Powell is under consideration by Trump and his team, which continues to raise concerns about the Fed's independence. Trump once again urged the Fed to cut interest rates on Monday, stating that if the Fed does not cut rates immediately, the U.S. economy could slow down. Despite Powell's indication last week that the Fed does not plan to cut rates soon, citing inflation pressure from new tariffs and economic uncertainty, the dollar's further weakening led to the rise of some Asian currencies.

The yen rose 0.5% against the dollar on Tuesday, the Australian dollar increased by 0.4% against the dollar, while the Singapore dollar and the South Korean won each fell slightly by 0.1%. The Indian rupee also fell by 0.1% against the dollar.

In the meantime, despite the People's Bank of China (PBOC) setting the RMB daily midpoint stronger than expected on Monday to counter market economic uncertainties, the RMB remained under pressure from U.S.-China trade tensions. China's Ministry of Commerce issued a stern warning to countries considering trade agreements with the U.S. that could harm Chinese interests, accusing Washington of using tariffs and monetary sanctions to force other countries to limit trade with China.

As the U.S.-China trade conflict continues to escalate, with the U.S. imposing tariffs as high as 145% on Chinese goods, China has responded with retaliatory tariffs. The onshore RMB rose 0.2% to 7.3074 per dollar, while the offshore RMB increased by 0.3%. The PBOC set the RMB's daily midpoint at 7.2074, 19 basis points stronger than the previous day and 850 basis points stronger than traders' expectations, demonstrating China's resolve to maintain financial stability under external pressure.

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