Asian FX Buoyed by Soft US CPI, High Oil Caps Gains – OCBC
OCBC strategists expect Asian currencies to trade with a firmer tone after softer US core CPI reduced near-term Fed hike expectations, though elevated oil prices may limit upside.
According to OCBC’s Sim Moh Siong and Christopher Wong, Asian FX should see a better tone after the lower-than-expected US core CPI reading tempered expectations for a near-term Federal Reserve rate hike, weakening the dollar.
However, the analysts note that potential gains are offset by persistently high oil prices, which tend to pressure Asian currencies due to higher import costs. The net effect is likely a cautious but positive bias for the region’s currencies.
Source: FXStreet Forex News