Asia FX Outlook 2H 2026

The report provides a 2H 2026 outlook for Asian currencies, highlighting a 'two-speed' recovery driven by AI-related semiconductor demand and regional economic divergence. Asian FX is expected to appreciate modestly against a softer USD, though performance will remain highly differentiated by country-specific fundamentals.

Key Takeaways

• 1.Asia is shifting to a 'two-speed' story, with AI-driven investment in North Asia (Taiwan, South Korea, China) outperforming economies reliant on domestic demand or facing structural policy hurdles.
• 2.Central bank policies in Asia are diverging, shifting from broad synchronization to country-specific responses based on local growth and inflation.
• 3.Asian FX outlook is moderately positive against the US dollar in H2 2026, driven by softer USD trends, easing oil prices, and capital flows into technology-linked sectors.

Table of Contents

• Asia FX outlook | Executive Summary
• Table of Contents
• Asia: Forecast summary
• Asia FX outlook | Forecast summary
• Asia FX outlook | Quarterly forecasts
• Asia economic outlook | Forecasts for key macro indicators
• Asia FX outlook | Policy rate forecasts
• Macro and currency themes
• CNY: Appreciation bias remains intact
• INR: Shoring up the Indian Rupee
• IDR: Policy support helps, but downside risks remain
• MYR: Domestic buffers to cushion near-term pressures
• PHP: Balancing the risks
• SGD: Domestic anchors cushion external headwinds, downside risks remain
• KRW: KRW likely to rise on good exports
• TWD: A moderate TWD appreciation on a more mature positive AI shock
• THB: Growth still low and uneven with limited policy levers
• VND: Moving ahead amidst the tug of war

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