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Asia FX: Softer USD offset by high Oil – OCBC

Asia FX: Softer USD offset by high Oil – OCBC

FXStreetFXStreet2026/07/15 18:51
By:FXStreet

OCBC’s Sim Moh Siong and Christopher Wong expect Asian FX to trade with a better tone after softer United States (US) core Consumer Price Index (CPI) reduced near-term Fed hike expectations and pressured USD. However, elevated Oil prices and varying energy sensitivities mean the relief will be uneven, with Indian Rupee (INR) and Philippine Peso (PHP) likely to stay pressured, while Renminbi (RMB) and Singapore Dollar (SGD) should remain relatively stable on stronger policy anchors.

Uneven relief across regional currencies

"Asian FX may trade with a better tone following the dip in the USD thanks to softer-than-expected US core CPI print. The data helped pare near-term Fed hike expectations and offers the Asian region some breathing room after the recent risk-off move. But the relief is likely to be uneven."

"Pullback in USD/Asia may still find some support especially with oil prices still elevated. Asian FX with greater sensitivity to energy costs and external balances, INR and PHP may therefore stay relatively pressured within the region. India’s wider goods trade deficit may further weigh on INR."

"Elsewhere, RMB and SGD should remain more stable given their lower oil sensitivity and stronger policy anchors. Overall, softer USD momentum helps, but still-high oil prices may cap the extent of Asian FX gains."

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