Asian currencies posted notable gains against the US dollar, driven by easing tensions in the Middle East, according to MUFG’s Lloyd Chan [1]. The Korean won (KRW) led the advance with a 1.8% increase, followed by the Thai baht (THB) with a 1.5% gain [1]. Chan highlighted that further de-escalation, such as Iran accepting a US-proposed deal and the gradual reopening of the Strait of Hormuz, could continue to support Asian foreign exchange markets [1].
Chan remains constructive on the Chinese yuan (CNY), Malaysian ringgit (MYR), and Singapore dollar (SGD), citing both supportive fundamentals and technicals for further upside against the dollar [1]. He expects the ringgit to benefit from CNY strength and notes that the Bank Negara Malaysia (BNM) policy meeting is likely to be a non-event, with the central bank expected to keep the policy rate unchanged at 2.75% [1].
Regarding the Indonesian rupiah (IDR), Chan is cautious about further USD/IDR upside, pointing to Bank Indonesia’s recent stabilization measures. These include tightening limits on USD purchases without underlying documents from $50,000 to $25,000, aimed at curbing speculative activity [1]. Additionally, Chan observes that markets may be underpricing the upswing in non-energy commodity prices, which could provide a further boost to Indonesia’s terms of trade [1].
CONCLUSION
Asian currencies have strengthened on hopes of Middle East de-escalation, with the KRW and THB leading gains. MUFG’s outlook remains positive for CNY, MYR, and SGD, while stabilization measures in Indonesia and commodity price trends are also in focus. The market impact is medium, with further upside possible if geopolitical risks continue to ease.