OCBC: Asian FX May See Selective Recovery on Softer USD
OCBC’s Christopher Wong suggests Asian currencies could find a breather if the US dollar weakens, noting that much of the Fed’s hawkish stance and US data strength are already priced in. Contained oil prices may also ease external balance and inflation pressures for net oil importers.
OCBC's currency strategist Christopher Wong argues that Asian foreign exchange markets have room for a selective recovery if the US dollar's recent momentum fades. He highlights that the market has already priced in a significant degree of Federal Reserve hawkishness and resilient US economic data, which could limit further upside for the greenback.
Additionally, Wong points out that contained oil prices should help alleviate external balance and inflation concerns for net oil-importing Asian economies. This combination of factors suggests a potential breather for some Asian currencies, though the recovery is expected to be selective rather than broad-based.
Source: FXStreet Forex News