Asia FX Weekly: Asia Inflation Data and RBI Meeting Key

The report highlights a busy economic week for Asia, focused on inflation data releases and the RBI policy meeting, while analyzing the impact of potential US-Iran de-escalation on oil prices and regional FX.

Key Takeaways

• 1.Asian central banks (specifically RBI, BSP, and BoK) are signaling more hawkish stances to combat inflation driven by oil prices and currency depreciation.
• 2.A potential US-Iran ceasefire deal and subsequent easing of oil prices are providing a reprieve for regional risk sentiment and currencies like the KRW and CNY.
• 3.China is shifting focus to an 'urban renewal plan' (2026-2030) targeting RMB15-20 trillion in investment to support infrastructure amid the housing market downturn.

Table of Contents

• FX views
• FX PERFORMANCE
• USD/CNY: CNY received mild support from optimism around US-Iran deal
• USD/KRW: Strong hawkish hold by the BoK
• USD/INR, USD/PHP and USD/VND: Hope versus Fears
• USD/SGD: Policy and fundamentals underpin SGD resilience
• Week in review
• Capital Flows
• Government bond yield spreads: Increased for 2y and 10y
• Central bank monitor
• The week ahead
• Weekly Calendar
• Forecasts
• Core indicators

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