Chart: Asian Currencies under pressure amid global risks

Earlier, we posted a chart from Bloomberg Briefs’Michael McDonough showing that Asia markets are not immune to whatever mess is happening in Europe, and indeed, the rest of the world. Fund outflow would be expected when developed world risks intensify, because of the deleveraging at home in the developed markets.

The recent intensification of the Euro crisis has triggered yet another outflow from emerging markets. This is manifested by the weakness of Asian currencies. We have heard quite enough about Indian Rupee falling from one low after another, and we have already learned that Chinese Yuan can actually fall.

To give a better idea of how Asian currencies are doing as a whole, the chart below shows the Bloomberg/JPMorgan Asia Dollar Index, which tracks Asian currencies. Compared that to the US dollar index, which, as expected, is showing a bottoming process of US dollar over the past few years. As you can see, Asian currencies overall have already fallen below last year’s low.

Source: Bloomberg

Meanwhile, Scott Barber of Reuters posted the following chart showing that BRIC currencies in general are all falling against the US dollar:

Source: Reuters

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About Zarathustra

Zarathustra: Founder and Managing Editor of Also sprach Analyst. Once an analyst, now an investor and entrepreneur. Based in Hong Kong, but Londoner at heart.