Asian FX: Oil shock and US yields pressure importers – MUFG

Source Fxstreet

MUFG’s Michael Wan highlights that Asian Emerging Markets (EM) currencies have weakened as higher US real yields, a stronger Dollar and elevated Oil prices weigh on sentiment. Oil-importing currencies such as Indian Rupee (INR) and Philippine Peso (PHP) are singled out as most vulnerable, alongside Indonesian Rupiah (IDR) given its sensitivity to United States (US) yields and domestic headwinds. Authorities in India and Sri Lanka have already tightened import rules to protect foreign exchange reserves.

Oil importers suffer under Dollar strength

"Asian EM currencies bore the brunt of the dollar's strength, higher US real yields, and elevated energy prices."

"This was particularly true for the oil importers such as INR and PHP, which now face a double whammy of higher oil prices and rising US yields, coupled with currencies with domestic headwinds and sensitive to US yields such as IDR."

"The MSCI EM Currency Index closed the week of 15 May 0.9% lower, its worst weekly performance since early March."

"Compounding the pressure, the 60-day correlation between Brent crude and the Bloomberg Dollar Spot Index has reportedly reached 0.55 — the highest since the index's inception in 2005 — meaning Asian oil importers face a simultaneous squeeze from a stronger dollar and a higher commodity import bill."

"India moved swiftly over the weekend to defend the rupee, tightening silver import rules and requiring prior government approval for silver bar imports, while Sri Lanka imposed a 50% import duty surcharge on private vehicles for three months, both citing foreign exchange reserve pressures."

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

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Iran Situation Rekindles Threat of War. Bitcoin Price Decline Accelerates, $75,000 Geopolitical Defense Line Faces TestU.S.-Israel discussions on resuming strikes against Iran trigger an accelerated Bitcoin price pullback; future gains depend on whether the $75,000 support level holds.On May 18, the poten
Author  TradingKey
12 hours ago
U.S.-Israel discussions on resuming strikes against Iran trigger an accelerated Bitcoin price pullback; future gains depend on whether the $75,000 support level holds.On May 18, the poten
placeholder
Euro softens to near 1.1600 on US–Iran tensions The EUR/USD pair trades in negative territory around 1.1615 during the early Asian session on Monday. The Euro (EUR) extends the decline as the prolonged US-Iran conflict weighs on the riskier assets.
Author  FXStreet
19 hours ago
The EUR/USD pair trades in negative territory around 1.1615 during the early Asian session on Monday. The Euro (EUR) extends the decline as the prolonged US-Iran conflict weighs on the riskier assets.
placeholder
Financial Markets 2026: Volatility Catalysts in Gold, Silver, Oil, and Blue-Chip Stocks—A CFD Trader's OutlookGet a comprehensive financial market 2026 outlook exploring key economic drivers, volatility catalysts in gold, oil and stocks, and what the evolving economic outlook means for cfd trading strategies and risk management on global markets.
Author  Rachel Weiss
May 15, Fri
Get a comprehensive financial market 2026 outlook exploring key economic drivers, volatility catalysts in gold, oil and stocks, and what the evolving economic outlook means for cfd trading strategies and risk management on global markets.
placeholder
Bitcoin Weekly Forecast: Is the month-long rally over?Bitcoin (BTC) edges slightly lower so far this week, trading at $80,800 on Friday after being rejected around the key overhead supply zone. Institutional investors also show cautious signs, with BTC spot Exchange Traded Funds (ETFs) recording an outflow of over $709 million through Thursday.
Author  Bitcoinist
May 15, Fri
Bitcoin (BTC) edges slightly lower so far this week, trading at $80,800 on Friday after being rejected around the key overhead supply zone. Institutional investors also show cautious signs, with BTC spot Exchange Traded Funds (ETFs) recording an outflow of over $709 million through Thursday.
placeholder
Australian Dollar softens to near 0.7200 as Trump and Xi set for second day of talks The AUD/USD pair attracts some sellers to near 0.7205 during the early Asian trading hours on Friday. Markets remain cautious ahead of the second day meeting between US President Donald Trump and Chinese President Xi Jinping in Beijing on Friday.
Author  FXStreet
May 15, Fri
The AUD/USD pair attracts some sellers to near 0.7205 during the early Asian trading hours on Friday. Markets remain cautious ahead of the second day meeting between US President Donald Trump and Chinese President Xi Jinping in Beijing on Friday.
goTop
quote