Asia ex-Japan (AxJ) currencies are expected to begin the week on a selectively cautious note following renewed tensions between the US and Iran, which have driven Brent crude oil prices above US$96 per barrel, according to OCBC’s Christopher Wong [1]. The escalation included strikes involving oil tankers near key Iranian export routes, raising concerns about potential further disruptions to shipping through the Strait of Hormuz and the possibility of additional upward pressure on crude prices [1].
Elevated oil prices and higher US Treasury yields are seen as headwinds for net energy importers in the region, potentially restraining the appreciation of Asia FX even if the US dollar remains relatively contained [1]. Oil-sensitive currencies such as the Philippine peso (PHP) and Thai baht (THB) may lag as markets assess the extent and duration of the supply disruption [1].
The regional data calendar is light, with a focus on upcoming Chinese economic releases. China’s August trade data (due 8 September) will be closely watched to gauge export momentum and tech-linked import demand, while China’s CPI/PPI (due 9 September) and credit data (due between 9–15 September) are expected to provide insights into domestic demand, pricing power, and credit appetite [1].
Overall, the combination of energy risks and limited regional data is likely to keep market participants cautious, with differentiation among Asia FX based on their sensitivity to oil prices and domestic economic buffers [1].
CONCLUSION
Renewed US-Iran tensions and elevated oil prices are creating a cautious environment for Asia ex-Japan currencies, particularly for net energy importers. With a light regional data calendar, market attention will focus on upcoming Chinese economic releases to gauge further direction.