APAC commodity currencies lead the way amid Russia-Ukraine war
Russia’s full-scale invasion of Ukraine was not priced in by markets and has led to spiralling commodity prices, higher risk premia, and strong demand for the USD. Asian foreign exchange (FX) markets have felt the combined impact of these developments.
What you will learn from this report:
- Currencies of large Asian commodity exporters (AUD, NZD, MYR) have substantially outperformed those of importers (INR, KRW, THB). We see these trends spilling over into Q2.
- Once market volatility subsides and the gentle weakening of the USD resumes, we expect the divergence to narrow and for most currencies to end the year stronger.
- One exception is the CNY, where we project a modest depreciation in H2 this year given China’s policy divergence with the US and other countries as the authorities stick to accommodative macroeconomic policies to bolster growth.
Large variations across APAC cities in medium term employment growth
Several major Asia Pacific cities will face medium term constraints on employment growth due to ageing populations.Find Out More
China’s renminbi (CNY) will benefit from its safe haven status
Recent experience suggest China’s renminbi (CNY) tends to serve as a safe haven during periods of heightened market volatility.Find Out More