Asian Currency

Emerging Asian currencies to see modest recovery in 2024 – HSBC


(Repeats Jan. 15 story with no changes to text)

Jan 15 (Reuters) – Emerging Asian currencies are set for a modest
recovery in 2024 amid sustained elevated interest rates in major economies,
China’s uneven economic rebound and potential portfolio inflow fluctuations,
HSBC analysts said.

Despite an uptick in emerging Asian currencies since December on
expectations of a potential rate cut by the U.S. Federal Reserve as early as
March, optimism has waned in the New Year as traders re-calibrated their bets.

“The recovery path for Asian currencies is likely to be choppy. There could
still be bouts of weakness against the resilient USD, especially while the Fed
has actually yet to cut rates,” the analysts said in a note.

China’s economic sluggishness, amid a protracted property crisis, has become
a major concern, despite Beijing’s stimulus measures to revive the beleaguered
economy.

The yuan is expected to finish trade at around 7.10 per dollar by
the end of the year, up from the previous forecast of 7.30.

The bank showed preference for currencies from export-oriented countries
linked to the artificial intelligence boom. Among their lower yielding
counterparts, HSBC favoured the South Korean won , Taiwan dollar
and the Singaporean dollar .

HSBC said it was more confident about the Indian rupee among
higher-yielding currencies, following the recent inclusion of Indian bonds in
global bond indexes, which could potentially attract multi-billion dollar debt
inflows.

The Bloomberg Index Services proposed including some Indian bonds in its
emerging market local currency index from September, a development that could
enhance the projected inflows from their inclusion in the JP Morgan index.

India and Indonesia are both set to hold parliamentary polls later this
year, where investors will await cues on policy directions and signs of fiscal
stability.

Currency

HSBC’s previous

HSBC’s current
pair

end-2024 forecast

end-2024 forecast
USD/RMB

7.30

7.10
USD/INR

84.00

82.80
USD/IDR

15,900

15,400
USD/KRW

1,300

1,270
USD/MYR

4.60

4.55
USD/PHP

57.0

55.2
USD/SGD

1.38

1.31
USD/TWD

31.6

30.2
USD/THB

36.4

34.2
USD/VND

25,200

24,400

(Reporting by Archishma Iyer in Bengaluru; Editing by Dhanya Ann Thoppil)
((Archishma.Iyer@thomsonreuters.com;))

Keywords: ASIA MARKETS/OUTLOOK (REPEAT)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



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