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Geopolitical risks push Asian currencies down for a second week

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Geopolitical risks push Asian currencies down for a second week

The prospect of higher US interest rates, as well as worsening conflicts in the Middle East and Ukraine boosted demand for the relative safety of the dollar, pushing down Asian currencies.

The Bloomberg-JPMorgan Asia Dollar Index fell 0.1% this week to 116.09 during afternoon trading in Hong Kong. South Korea’s won led losses, dropping 1% to 1,029.32 per dollar, data compiled by Bloomberg show. India’s rupee weakened 0.6% to 60.2913 and Indonesia’s rupiah declined 0.2% to 11,618.

The Bloomberg Dollar Spot Index, which tracks the currency against 10 major counterparts, climbed 0.3% this week, the biggest increase since the five-day period ended on May 23.

Elsewhere in Asia, Taiwan’s dollar fell 0.2% from July 11 to NT$30.051 against the greenback and Thailand’s baht was steady at 32.151. The Philippine peso and Malaysia’s ringgit gained 0.1% to 43.515 and 3.1835. Vietnam’s dong slipped 0.1% to 21,225.

“People are avoiding emerging-market assets following the escalation of geopolitical risk in the Middle East,” said Saktiandi Supaat, head of foreign-exchange research at Malayan Banking Bhd. in Singapore, speaking to Bloomberg. “The plane crash didn’t help sentiment.”

The prospect of higher rates in the US “also had some impact on emerging-market currencies,” said Ho Woei Chen, an economist at United Overseas Bank Ltd. in Singapore. “Geopolitical risks are moving to the front at the moment.”

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media contact

About

deVere Group – Foreign Exchange’s Public Relations Department deals with all areas of the media and external communications including international, national, regional, local, trade, consumer, print, broadcast, social and online. The Department aims to provide a helpful service to journalists, broadcasters and editors, amongst others, and reply to all media enquiries, including urgent enquiries out of hours, within agreed deadlines.

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Our press office does not have access to client details and will not be able to assist with individual client enquiries. Please contact deVere Group – Foreign Exchange’s Head of Public Relations on [email protected] or call +44 2071220925.