Asia Economics Comment When currencies are on the move

Research evidence excerpt

Asia Economics Comment When currencies are on the move

22 June 2026

Asia Economics Comment Economics

When currencies are on the move Asia

It may be a relatively quiet week data-wise, but central banks will watch Frederic Neumann

closely. Foreign exchange markets, that is. The US-Iran deal may have ChiefGlobalAsiaResearchEconomist,Asia Co-head

taken the sting out of energy costs, and thus price pressures. However, TheBankingHongkongCorporationand ShanghaiLimited

monetary officials will remain on guard in Asia: a bouncy US dollar means fredericneumann@hsbc.com.hk+852 2822 4556

that there is little reprieve for now, with a tightening bias still needed for

most. After the Warsh presser last week, and its hawkish gloss, foreign

exchange markets have been on the move. Tocus now shifts to inflation

numbers in the US, but keep an eye on price gauges in Australia, Japan,

and Singapore as well.

There was plenty to digest over the past week. True, central banks in Asia delivered what was expected:

hikes in Japan, Indonesia, and the Philippines, and holds in Taiwan and Australia.

But, the surprise, at least judging from market reaction, came from the Fed, with new Chair Kevin Warsh

delivering what as seen as hawkish comments (see Ryan Wang, et al., Guidance ditched, changes

pitched, 17 June 2026).

As a result, the dollar caught wind in its sales, even as oil prices came off the boil.

That leaves most Asian central banks on the defensive.

Even after its hike, HSBC’s Pranjul Bhandari, expects Bank Indonesia to deliver another rate increase as

soon as 3Q (see Bank Indonesia: Another hike to cement recent policy pivot, 18 June, 2026). Similarly in

the Philippines, HSBC’s Aris Dacanay forecasts that the BSP will need to tighten further, although he now