The EM Asia FX Strategist: Asia FX Monthly – Not out of the woods yet

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The EM Asia FX Strategist: Asia FX Monthly – Not out of the woods yet

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The EM Asia FX Strategist

Asia FX Monthly – Not out of the woods

yet

Summary of FX views 20 May 2026

CNY/CNH (bullish): We expect USDCNY to consolidate around the recent range as DXY GEM FI & FX Strategy

gets supported, but remain constructive on CNY in the medium term on robust exports. EM Asia

HKD (neutral): We expect HKD funding conditions to turn incrementally tighter heading

Table of Contentsinto the summer months due to upcoming dividend payments.

INR (bearish): Terms‑of‑trade shocks should widen the CAD, while stagflationary China 2

effects may trigger further portfolio outflows. Forecast USDINR at 98/USD by end-2026. Hong Kong 5

IDR (bearish): Domestic capital flight keeps IDR under depreciation pressure amid fiscal India 7

concerns and broader risk aversion. We revise our end-2026 forecast to 18,000/USD. Indonesia 9

KRW (neutral): USDKRW has undergone a roundtrip in recent weeks. Initial Korea 11

strengthening of KRW was quickly reversed due to renewed equity outflows. Malaysia 13

MYR (bullish): MYR is the only regional beneficiary of higher energy prices. Correlation The Philippines 15

with CNY further supports MYR. Watch for rising political risks to the view. Singapore 17

PHP (bearish): Higher oil prices widen CAD to unsustainable levels. BSP smoothing Taiwan 19

recently and rate hikes marginally supportive. Revised end-2026 forecast at 64/USD. Thailand 21

Vietnam 23

SGD (neutral): Policy-tightening bias should limit SNEER downside within the band,

FX Models 24

while negative carry caps upside. We expect SNEER to trade within the 1.3-1.8% range.

Acronyms and Abbreviations 25

TWD (neutral): USDTWD has been range-bound with fluctuations driven by portfolio

flows.