Weakness in Asian FX expected due to AI-driven equity losses and US-Iran tensions lifting the USD and oil prices.
Asian currencies are poised for a weaker start to the week as risk-off sentiment dominates, driven by losses in AI-led equities and escalating US-Iran tensions. The US Dollar remains bid, pressuring high-beta currencies like the South Korean won (KRW) if regional equities stay soft.
Recent declines in Brent crude provided temporary relief for oil importers, but renewed geopolitical risks could reverse this trend. Analysts warn that unless risk sentiment stabilizes quickly, broad-based weakness in Asian FX may persist.
The combination of crowded AI and semiconductor exposure reductions and higher oil prices creates an unfavorable environment for Asian currencies, particularly those sensitive to equity and commodity movements.