The US dollar is volatile, with market fluctuations putting pressure on its valuation and positioning. At the same time, the development is paving the way for other currencies, notably the ASEAN and several Asian currencies, to surge, sparking record-high rallies in their wake. But why are these currencies surging against the US dollar?
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Asian and ASEAN Currencies Spark Massive Rallies: What’s Happening
Asian currencies are rallying way ahead of the curve against the US dollar. The recent surge has been triggered by the recent policy easing and the Federal Reserve’s decision to cut interest rates by 50 basis points.
The announcement has hammered the US dollar to some extent, allowing ASEAN and Asian currencies to surge and hit record highs.
Key Performers: Indonesia Rupiah And South Korean Won
Indonesia Rupiah and South Korean Won emerged as the biggest deal breakers in the middle of this, securing maximum gains from the recent Fed development. The rupiah is currently trading at 15405, slightly ahead of its earlier position of 15340. Conversely, the Won peaked at 1330 against the US dollar, noting a change of 0.266821 from its earlier position of 1324.52.
Other Notable Performers: Malaysian Ringgit, Singapore Dollar, And Philippine Peso
The Malaysian Ringgit acquired the third spot, rising and peaking to its highest since 2022. The currency is currently at 4.305, surging 1.370499 from its old trade value of 4.2645. Similarly, the Singapore Dollar and Philippine Peso rose slightly against the USD, trending in green.
Global Impact: Mexican Peso And African Rand
Apart from leading Asian currencies, the Mexican peso and African rand also showed remarkable price ascents against the US dollar.
“We expect to see further, albeit limited, appreciation in Asian currencies in the fourth quarter, amid some further dollar weakness, but we expect much of this to be reversed into 2025.” Barclays Plc strategists, including Mitul Kotecha, shared
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South Eastern Currencies Will Continue To Dominate The Global Financial Markets
Per the edge Malaysia, these currencies will continue to nag the US dollar in the long haul. ASEAN and Asian regions are growing remarkably, inviting huge foreign influxes and funds, signalling a series of growth opportunities. The region is emerging as a hub of innovation and manufacturing, inviting global financial giants to set up their base due to its lucrative demographics and setting.
“There are more manufacturing-driven economies, while Singapore is very modern,” said Cezar P. Consing, President, Chief Executive Officer, and Board Director, Ayala Corporation. “There are opportunities when ASEAN can come together as a bloc and present itself as a very whole economy.”
Similarly, the region’s expansionary activities are also commendable and add more strength to its economic structure. ASEAN’s growing ties with India and China benefit the region and may fetch more power and prestige for its financial and trade endeavours.
“Asia FX performance can extend, but there will be losers and winners,” said Alvin Tan, head of Asia FX strategy at Royal Bank of Canada in Singapore. “Asia’s growth and policy outlooks are varied, and this will give rise to varied FX performance. The Chinese yuan and Indian rupee will lag, while Southeast Asia FX and the won can outperform.”
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