Asia FX: Stronger Dollar and Oil weigh on CNY and peers – BNY
BNY’s Geoff Yu highlights that a stronger US Dollar (USD), higher Oil prices and rising global yields are pressuring Asian currencies and assets.
The article highlights that a stronger US Dollar (USD), higher Oil prices, and rising global yields are putting pressure on Asian currencies and assets. BNY's Geoff Yu notes that while Chinese Yuan (CNY) remains relatively resilient, it is drawing official scrutiny, while currencies like Indian Rupee (INR), Philippine Peso (PHP), Thai Baht (THB), and South Korean Won (KRW) are vulnerable or stretched.
Yu advises increasing CNY hedges without chasing recent appreciation. The article also mentions that a stronger USD, elevated oil prices, rising global bond yields, and renewed foreign outflows are continuing to pressure Asian currencies, equities, and fixed income. Differentiation remains the key regional theme, but recent divergences are becoming stretched, with further currency depreciation testing the limits of central-bank FX smoothing operations.
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