Asian FX: Vulnerable under risk-off and stronger Dollar – OCBC

OCBC’s Sim Moh Siong and Christopher Wong expect Asian FX to start the week on a softer footing as AI-led equity losses and renewed US–Iran tensions keep the Dollar bid. High-beta Asian currencies such as KRW are seen struggling if regional equities remain weak, with Oil importers losing some relief from the earlier Brent pullback unless risk sentiment stabilizes quickly.

High-beta Asian FX under pressure

"Asian FX. Likely to start on a softer footing. Friday’s AI-led equity selloff still points to pressure from the equity-sentiment channel, especially if markets continue to reduce crowded AI/semiconductor exposure."

"The weekend re-escalation in US-Iran tensions adds to the risk-off tone, with crude likely to gap higher at the Monday open."

"That makes an unfriendly environment for Asian FX."

"USD can stay bid, oil importer FX may lose some relief from the earlier brent pullback, and high-beta Asian FX, including KRW may struggle if regional equities remain soft."

"Overall, Asian FX looks vulnerable to broad-based weakness unless risk sentiment stabilises quickly."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)