Asia FX: KRW and MYR lead firmer profile vs USD – OCBC

OCBC strategists Sim Moh Siong and Christopher Wong have recalibrated Asian FX forecasts slightly firmer against the US Dollar (USD), with more notable upgrades for KRW and MYR. They note stronger Korean domestic fundamentals, improved exporter flows and reduced capital outflow concerns, while Malaysia benefits from resilient growth, supportive external balances, fading political noise and earlier measures to encourage FX inflows.

Differentiated gains across Asian currencies

“Asian FX forecasts were calibrated modestly firmer vs USD, reflecting developments over recent weeks. Revisions are more notable for KRW, on firmer domestic/flow dynamics, and MYR, where resilient fundamentals, supportive external balances and fading political noise have improved the backdrop.”

“Revisions to Asian FX forecasts. We have recalibrated some of our Asian FX forecasts to reflect a slightly firmer profile against the USD. The revisions incorporated recent market developments and shifts in underlying FX drivers over the past few weeks.”

“More broadly, we continue to expect a differentiated path across Asian currencies rather than a uniform trend, with the extent and pace of gains likely to remain dependent on country-specific fundamentals, monetary policies, fund flows and external developments including shifts in yields, oil price movements.”