OCBC strategists Sim Moh Siong and Christopher Wong expect Asian FX, especially high-beta Oil importers like KRW, THB, PHP and INR, to open weaker as renewed geopolitical uncertainty supports crude and the Dollar. However, resumed Hormuz transit tempers tail risks. They see CNH and SGD as relatively resilient and favour AUD over EUR while staying defensive on Asian Oil importers.

High-beta importers under pressure

"Asian FX are likely to start the week on a softer footing as renewed geopolitical uncertainty risks feeding back into crude prices, broader risk sentiment and defensive USD demand."

"Asian FX in particular, higher-beta and net oil importer FX, including KRW, THB, PHP and INR may remain more vulnerable while lower-beta currencies such as CNH and SGD could prove relatively more resilient."

"Still, with limited transit through the Strait of Hormuz having resumed, markets may stop short of fully repricing the most acute disruption scenario for now, which suggests a softer Asian FX open rather than an outright disorderly selloff."

"In a drawn-out conflict with sticky rather than spiking oil, FX should rotate back to terms-of-trade divergence—supporting energy exporters while pressuring importers. We favour AUD over EUR and stay defensive on oil-importing Asian currencies such as KRW, INR, THB and PHP."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)