Investing.com– Most Asian currencies were trading in a steady or low range on Tuesday as speculation about a Donald Trump presidency helped the dollar rise above increased bets on interest rate cuts.

The Japanese yen underperformed its peers, pressured by a stronger dollar and facing continued warnings from authorities about currency market intervention.

The sentiment towards regional markets also remained negative due to faint data from China, which pointed to a slowdown in growth in Asia’s largest economy.

Dollar extends bounce amid speculation about Trump presidency

Both stocks and currencies rose 0.1% in Asian trade, extending an overnight rebound from three-month lows.

Speculation that Trump will win a second term has intensified following the failed assassination attempt on the former president last weekend, which significantly boosted his popularity.

A second Trump term is expected to be good for the dollar, given that he is widely expected to implement more protectionist trade policies that could result in higher inflation. Such a scenario could keep interest rates relatively high in the long term.

Still, the dollar took a large hit last week as some tender inflation data and dovish signals from the Federal Reserve boosted bets that the central bank would cut rates by at least 25 basis points in September. That notion capped any major gains for the U.S. dollar.

Attention Tuesday turned to upcoming data that is likely to provide more clues about a potential slowdown in the U.S. economy.

Japanese Yen Weakens, Threats of Intervention Persist

The Japanese yen weakened on Tuesday, retreating further from its recent rally against the dollar. The pair rose 0.4% to 158.64, after falling from nearly 162 last week.

The pair’s acute decline comes as the dollar weakened significantly last week. But it also sparked speculation about whether the Japanese government was intervening in currency markets to support the yen.

Japanese officials repeated their warnings about intervention on Tuesday, saying they were ready to take all possible measures to stem excessive volatility in currency markets.

China’s Yuan Fragile as Economic Troubles, Trump Speculations

The Chinese yuan weakened on Tuesday, with the pair extending Monday’s gains and approaching an eight-month high.

The yuan was hit tough by data showing China’s economy grew slower than expected in the second quarter.

But speculation about a Trump presidency has also weighed on the yuan, given that he has maintained a largely negative rhetoric toward Beijing in his first term. Trump has imposed high import tariffs on several Chinese goods, sparking a trade war with China.

Broader Asian currencies traded flat to low. The South Korean won and Singapore dollar rose around 0.1%.

The Australian dollar fell 0.2%, while the Indian rupee remained near record levels.