Investing.com – Most Asian currencies traded in a narrow range on Tuesday as investors assessed the potential for less stringent trade tariffs under fresh U.S. President Donald Trump, while the dollar stabilized after overnight losses.

China’s yuan continued to lag its peers after its onshore currency hit its weakest level in 17 years on Monday. Although the currency did recover, it remained unstable, and fresh US restrictions on Chinese companies increased pressure on the currency.

The dollar also steadied after recouping most of its overnight losses as a recent report sparked heightened speculation about Trump’s tariff plans.

The Japanese yen pair rose 0.4% to its highest level in almost six months, while the Australian dollar rose 0.2%. Australian data for November will be published on Wednesday.

The South Korean won pair fell slightly while the Indian rupee pair stabilized after rebounding sharply from record highs above 86 rupees.

The dollar remains above its lowest level in a week amid tariff speculation

Rates rose slightly in Asian trade, recovering from Monday’s lowest level in a week.

The dollar recovered most of Monday’s losses after Trump denied a Washington Post report that his administration had imposed less stringent trade tariffs than initially promised.

Trump, who is scheduled to take office in less than two weeks, has announced the imposition of high import tariffs on China and other major economies, raising concerns about a renewed global trade war.

The prospect of additional tariffs has been a major factor in the dollar’s recent rally, as has growing confidence that the Federal Reserve will cut interest rates in 2025 at a slower pace. Hawkish comments from Fed representatives confirmed this thesis over the weekend.

This week’s attention now turns to key December data, which will be released on Friday to provide more insight into the U.S. economy and labor market.

Chinese yuan unstable amid US trade disruptions

The Chinese yuan was the weakest Asian currency this week, hitting its weakest level in 17 years on Monday.

The onshore yuan pair rose 0.3% on Tuesday, with the Chinese currency remaining volatile amid further trade difficulties with the United States.

The United States on Tuesday added tech giants Tencent Holdings Ltd (HK:) and Contemporary Amperex Technology (SZ:) to a blacklist of companies linked to China’s military, a move that threatens to further strain ties between the world’s largest economies.

Beijing is expected to implement even more stimulus measures amid a renewed trade war with the US

This week’s focus will be on , due for release on Thursday, for more clues about Asia’s largest economy as it seeks to support growth.