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Trade Tussle to Highlight Asia Deficits as Currencies Weaken

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Hong Kong Dollar Falls to Weakest Since 2007 as Rate Gap Widens
Photographer: Xaume Olleros/Bloomberg
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The current-account deficit is making a comeback as a reason to sell some Asian currencies, according to Credit Suisse Group AG and Neuberger Berman Group LLC.

U.S. President Donald Trump’s order to impose metal tariffs last week added to the pressure which Asian exchange rates are already facing this year from a hawkish Federal Reserve and rising Treasury yields. While a trade war is unlikely to break out, inflows into risk assets will be stymied, shining the spotlight on countries needing funds to narrow their deficits, said Trang Thuy Le, a macro-strategy analyst at Credit Suisse in Hong Kong.