**Forex Market Update: Asian Currencies Under Pressure Amid U.S.-China Trade Developments**

Asian currencies faced a downturn on Monday as the U.S. dollar strengthened following the announcement of a new trade deal between the U.S. and China. Notably, the Indian rupee showed resilience and gained following a ceasefire agreement between India and Pakistan.

Market participants are keenly monitoring China’s recently released Consumer Price Index (CPI) data from the weekend, which is being interpreted as a key indicator for the economic growth trajectory of China, the world’s second-largest economy.

The U.S. Dollar Index, which tracks the dollar against a range of major currencies, climbed 0.2% during the Asian session, approaching a one-month peak.

**Trade Deal Impacts Regional Currency Markets**

In Geneva, U.S. and Chinese officials concluded significant trade talks, with preliminary reports confirming an agreement had been reached. U.S. Treasury Secretary Scott Bessent described the discussions as resulting in “substantial progress,” while Chinese Vice Premier He Lifeng stated that an “important consensus” was achieved. A new economic dialogue mechanism was also agreed upon, although specifics are pending further announcements.

These developments provided support for the dollar, leading to declines in various regional currencies. The South Korean won experienced a notable drop, with its USD/KRW pair surging by 0.6%. The Japanese yen also lagged, with a rise of 0.4% in the USD/JPY pair. The Singapore dollar (USD/SGD) experienced a minimal uptick of 0.1%, and the Malaysian ringgit (USD/MYR) rose by 0.4%.

Conversely, the Australian dollar found a slight advantage, with its AUD/USD pair increasing by 0.2%.

**Indian Rupee Benefits Amid Ceasefire Agreement**

The Indian rupee gained momentum after India and Pakistan reached a U.S.-mediated ceasefire in the Kashmir region following intense conflicts. Reports indicate a marked reduction in hostilities along the border since the ceasefire on Saturday, encouraging investor sentiment. The USD/INR pair fell by 0.9% on Monday, settling at 84.621 rupees.

**Chinese Yuan Reacts to Weak Economic Data**

The Chinese yuan also faced pressure, with its onshore USD/CNY pair dropping by 0.2% amid the easing trade tensions between Washington and Beijing. Recent data revealed ongoing inflationary pressures in China, highlighting a decline in consumer prices for three consecutive months, coupled with the steepest fall in factory-gate prices in six months. These developments underscore the challenges China continues to face due to protracted trade disputes with the United States.

**Market Implications for Forex Traders**

Forex traders should closely monitor developments surrounding U.S.-China trade relations, particularly any upcoming announcements regarding tariff adjustments. Additionally, geopolitical factors—such as the India-Pakistan ceasefire—could influence regional currencies and provide trading opportunities. With ongoing economic data releases from China, traders should stay alert for potential volatility in the yuan and related currency pairs.

As always, maintaining a diversified portfolio and employing risk management strategies will be key as market dynamics continue to unfold.