Asian Currencies’ Near-Term Gains Versus Dollar May Be Limited, OCBC Strategists Say

Asian currencies may have limited near-term upside against the U.S. dollar as the Federal Reserve maintains a hawkish stance, strategists at OCBC’s research unit said. According to Jin10, the strategists said the constraint could be more pronounced for low-yielding currencies and those more sensitive to moves in U.S. Treasury markets, including the Thai baht and the South Korean won, and to some extent the Singapore dollar. They added that falling oil prices remain an important offsetting factor, easing current-account and inflation pressures for oil-importing economies. The strategists cited the Indian rupee, the Philippine peso, and the Indonesian rupiah as currencies that could benefit from lower oil prices.