Asia FX: A correction and not a change in trend – ANZ

By FXStreet Research Team at ANZ, suggests that the selloff in the USD has led to a rally in Asian currencies, but they see this as a correction and not a change in trend.

Key Quotes

“Concerns over the impact of financial market turmoil on the US economy has resulted in Fed rate hike expectations getting pared back, which is partly behind the dollar weakness.

A weaker US economy is hardly a compelling rationale for a sustained rally in Asian currencies, especially with export weakness extending.

Once the long dollar positioning is cleansed, we look for renewed weakness in Asian currencies, regardless of whether the Fed ends up hiking or not this year.”
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Source:: FX Street