Asian currencies eclipse Developed Markets

Fed cut expectations drove the US Dollar (USD) weaker across the board in overnight markets. Asian currencies performed best, led by the THB, KRW, MYR, and PHP, which appreciated more than 1% against the USD. Single-day gains in the IDR and TWD were also substantial at 0.9% and 0.8%, respectively, DBS FX strategist Philip Wee notes.

Asian currencies recovering the year’s losses

“We view the Asian currency rebound as a recovery of the losses from the Fed’s ‘high for longer’ rates stance in the first half of this year. The MYR has become the strongest currency this year, appreciating by 5.1% ytd, a far cry from the 4% ytd loss in April. The SGD is the other currency that managed to appreciate for the year, by 1.3% ytd, sharply reversing the 3% ytd loss by the end of April.”

“While the THB is flat for the year, it did wipe out the 7-8% ytd loss in the first four months. The outlook for Asian currencies is supported by the recovery in the region’s largest currencies (JPY and CNY), many Asian economies reporting stronger-than-expected growth lately amid US growth worries, and no expectations for their central banks to match the Fed cut cycle over the next two years.”

“There is scope for the KRW, PHP, IDR to play catch up in recovering this year’s losses.”

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.