According to OCBC strategists Sim Moh Siong and Christopher Wong, Asian foreign exchange markets have experienced a relief rally, primarily driven by a sharp pullback in oil prices and market optimism regarding the possibility of a US–Iran deal to end the war. The strategists note that Iran is currently evaluating a new US proposal and has about 48 hours to respond. However, they caution that it is still too early to determine if an agreement will be reached, and any normalization of energy flows through the Strait of Hormuz remains uncertain [1].
The strategists highlight that high-beta, AI/tech-linked Asian currencies such as the Taiwan Dollar (TWD), South Korean Won (KRW), and Malaysian Ringgit (MYR) are expected to outperform in this environment. In contrast, oil-sensitive currencies including the Indonesian Rupiah (IDR), Indian Rupee (INR), Philippine Peso (PHP), and Thai Baht (THB) are likely to remain under pressure. The Korean Won (KRW) and Thai Baht (THB) led the recent rebound among Asian currencies [1].
OCBC further notes that while low-beta Asian currencies like the Singapore Dollar (SGD) may continue to hold up, their gains are expected to be more modest compared to the high-beta currencies. The analysts emphasize that the current rally should be viewed as a relief rally rather than a full reversal, unless there is a more meaningful de-escalation of geopolitical tensions. The differentiation theme between high-beta gainers and oil-sensitive laggards remains intact, even if a deal is eventually reached [1].
CONCLUSION
Asian FX markets have rebounded on lower oil prices and hopes for a US–Iran deal, with high-beta, tech-linked currencies outperforming and oil-sensitive units lagging. OCBC strategists caution that the rally is likely temporary unless geopolitical tensions ease further, and normalization of energy flows remains a key uncertainty.