Yen traders appear to have completely dismissed the potential for a hawkish policy shift from the Bank of Japan later this week and are pushing the yen to new lows for the year, while South Korea’s won has lost around 5% since July.
India’s rupee is again hovering around record lows against the dollar, China’s yuan is struggling to rebound much from the 16-year low struck earlier this month, and Indonesia’s rupiah has slid around 5% since May to a six-month low.
Of course, other factors are at play here, not least the broader strength of the U.S. dollar, fortified by surprisingly resilient U.S. economic data and a persistently wide yield advantage over its main rivals.
Asian currencies have generally performed poorly this year. Smelling blood and being highly attuned to the path of least resistance, currency traders may be sensing the energy price spike is another layer of vulnerability for Asian currencies to prey upon.
Could the oil price spike feature in the raft of central bank policy decisions and outlooks this week? In Asia, that would be the central bank meetings in Taiwan, the Philippines and Indonesia on Thursday, and Japan on Friday.
Tuesday’s Asian and Pacific economic calendar is pretty light, with the Reserve Bank of Australia’s last policy meeting minutes the main event. Malaysian trade data and balance of payments figures from the Philippines are also on tap.
