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Oil rebound weakens several Asian currencies, OCBC warns

OCBC said the impact is especially acute for net oil importers, where higher crude can worsen terms of trade and add to imported inflation.

Reported · Written up by our desk · EM Currencies

OCBC analysts Sim Moh Siong and Christopher Wong said the Philippine peso, Indian rupee, Indonesian rupiah, and Thai baht have weakened as an oil rebound renewed pressure on net oil importers.

They cautioned that any relief from earlier lower oil prices may be fragile, warning that renewed crude strength can deteriorate terms of trade, lift imported inflation, and weigh on external balances.

The analysts added that even if the broader US dollar backdrop becomes more supportive, oil-sensitive Asian currencies may not be out of the woods until the oil outlook stabilizes.

FXStreet also noted near-term focus on US CPI, given its implications for Federal Reserve expectations, US yields, and the USD, as markets look for new direction ahead of the data.

Latest closeWTI crude $83.42 ▲1.6%

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