Investing.com – Most Asian currencies gained on Monday as the dollar weakened ahead of U.S. President-elect Donald Trump’s inauguration, while China’s central bank left benchmark lending rates unchanged to support the yuan.

Regional currencies posted marginal gains as markets remained cautious ahead of Trump’s inauguration in anticipation of additional trade tariffs on Chinese exports. This could trigger a trade war and affect most Asian economies due to their trade-based economy.

In Asian trading, the rate fell 0.3%, moving away from a 26-month high reached last week. The dollar remains near its highest level in two years after the Federal Reserve adopted a hawkish stance last month.

also decreased by 0.3%.

China’s yuan is largely subdued even as the PBOC maintains policy rates

The Chinese yuan onshore pair rose 0.1%, while the offshore pair gained 0.2%.

The Chinese yuan traded in a narrow range on Monday, showing little reaction to the People’s Bank of China’s decision to keep lending rates steady.

The Bank of China left the annual rate unchanged at 3.1% and kept the interest rate used to set mortgage rates at 3.60%.

The move, aimed at supporting the weakening yuan, maintaining liquidity and supporting economic recovery, had little effect on changing market sentiment towards the currency.

Waiting for a decision on interest rates in Japan and Malaysia

The Japanese yen pair fell 0.3% as markets priced in an interest rate hike at the end of the week.

The BOJ is expected to raise interest rates next week, provided there are no market disruptions after Trump’s inauguration. The central bank is likely to maintain its commitment to further interest rate increases if the economy maintains its recovery, Reuters reported on Friday, citing sources familiar with the matter.

The Malaysian ringgit pair fell 0.1%, overtaking the . BNM is expected to keep interest rates at 3.00% for the 10th straight time on Wednesday due to mighty economic growth and controlled inflation, a Reuters poll showed.

Elsewhere, the Australian dollar rose 0.2% while the Singapore dollar pair fell 0.3%.

The Thai baht pair was largely unchanged while the Indian rupee pair fell 0.1%.

The South Korean won pair fell by 0.4% amid the ongoing political crisis in the country.