Further pain in store for Asian currencies after turbulent first-half

By Harish Sridharan

June 30 (Reuters) - Asian currencies will wallow in the near-term, analysts forecast this week, with any respite from their first-half losses only likely to come in the form of proactive policy normalization by regional central banks combined with a Chinese recovery.

A mix of elevated commodity prices and narrowing interest rate differentials have piled pressure on most Asian currencies, with some hitting multi-year lows in recent weeks.

Foreign money has flowed out of emerging Asia, excluding China, for five months in a row in the face of a reluctance among central banks to hike rates.

The Taiwanese dollar TWD=TP , South Korea's won KRW=KFTC and the Philippine peso PHP= have all weakened by more than 6.8% against a strong U.S. dollar this year, while the Indian rupee INR=IN is near record lows.

Mounting fears of a global recession have forced investors to flee stocks and riskier Asian assets in favor of bonds and the greenback, which recently hit a nearly two-decade high against major currencies.

While Asian central banks have turned more hawkish recently to control spiking prices, a focus on growth and relatively controlled inflation has meant rate hikes have not been as aggressive as those by the U.S. Federal Reserve.

"Rate hikes (in Asia) are ultimately going to be of a smaller quantum and at a slower pace compared to the U.S. Fed. So, policy rate differentials will continue to be moving against Asia," Duncan Tan, Rates Strategist at DBS Bank, said.

Of the 13 analysts and strategists interviewed this week, more than half expect Asian currencies to remain under pressure as long as aggressive Fed tightening persists.

"We could possibly see EMFX stabilization once peak hawkishness is reached, but any meaningful gains will hinge on growth and (the) extent of U.S. dollar pullback," Christopher Wong, FX strategist at Maybank, said.

Although a rejuvenation of China's economy after the lifting of COVID-19 curbs could drive flows back into Asia, investors will refrain from placing big bets until they see data which allows them to gauge the pace of any recovery.

"The reality is that China finds itself opening to a slowing global economy. This is leaving the outward-facing nation vulnerable going into the second half of 2022," said Daniel Dubrovsky, a strategist with IG.

Net commodity exporter Indonesia, historically regarded as susceptible to global policy tightening, has remained resilient this time, with strong commodity exports and reopening from COVID-19 restrictions helping it outperform other markets.

The Jakarta Stock Exchange Composite Index (JCI) .JKSE is the only major equity index in the region to post significant gains this year, jumping nearly 5%.

Major EM Asia Stock Indexes Asian Stocks And Currencies
Performance Link

Reporting by Harish Sridharan in Bengaluru; Editing by Krsihna
Chandra Eluri

免責聲明: XM Group提供線上交易平台的登入和執行服務,允許個人查看和/或使用網站所提供的內容,但不進行任何更改或擴展其服務和訪問權限,並受以下條款與條例約束:(i)條款與條例;(ii)風險提示;(iii)完全免責聲明。網站內部所提供的所有資訊,僅限於一般資訊用途。請注意,我們所有的線上交易平台內容並不構成,也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。


本網站的所有XM和第三方所提供的内容,包括意見、新聞、研究、分析、價格其他資訊和第三方網站鏈接,皆爲‘按原狀’,並作爲一般市場評論所提供,而非投資建議。請理解和接受,所有被歸類為投資研究範圍的相關内容,並非爲了促進投資研究獨立性,而根據法律要求所編寫,而是被視爲符合營銷傳播相關法律與法規所編寫的内容。請確保您已詳讀並完全理解我們的非獨立投資研究提示和風險提示資訊,相關詳情請點擊 這裡查看。

我們運用 cookies 提供您最佳之網頁使用經驗。更改您的cookie 設定跟詳情。