PETALING JAYA: A basket of Asian currencies is feeling the heat this week, after latest comments from a US Federal Reserve official again indicated the policymaker is not prepared to lower rates even as 2024 nears its second half.
Her comments led Asian notes sliding to their weakest in more than 19 months, with the Bloomberg Asia Dollar Index easing 0.1% yesterday to the lowest level since November 2022. Moreover, in recent weeks, Chew told StarBiz that the dollar has also been gaining on the yuan, as recent dividend outflows by Chinese companies to shareholders, which is expected to last up to August, are adding to the forex demand-supply imbalance that has been present in China since July last year.
At the same time, another economist at a local research firm believes Asian currencies would see more pressure compared to equities for as long as the Fed continues the stalemate on rates. In resonance with Chew’s perspective, Nouri Chatillon, economist at global credit insurance firm Coface said since the beginning of the year, Asian currencies have been under unabating depreciation pressure, as US interest rates have remained at high levels.