Asian currencies under pressure due to Federal Reserve's stance, says HSBC

Asian currencies under pressure due to Federal Reserve's stance, says HSBC

The bank highlighted China’s economic instability as a significant concern for the region. There has been no clear sign of stability in China’s economy, which is critical for all other Asian economies. This instability presents a considerable challenge, according to HSBC.

HSBC also predicted that foreign exchange authorities might be the last line of defense for regional currencies under these circumstances. Specifically, Japan’s Ministry of Finance is expected to intervene to maintain the USD/JPY exchange rate around 150. The People’s Bank of China is also anticipated to aim for stabilizing the USD/CNY rate around 7.3000.

As of today, the USD/JPY exchange rate stands at 148.28, while the USD/CNY rate has seen a slight increase of 0.2%, currently at 7.3003.

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