Will virus plague Asian currencies?
UNCERTAINTY SURROUNDING HOW TO HANDLE COVID-19 POINTS TO ONGOING RISKS
Should investor anxiety over the virus accelerate further, the path of weakness opens up for additional losses Jameel Ahmad,
Global head of currency strategy and market research at FXTM All the currencies are moving within a narrow range, and are by and large stable for quite some time, despite the coronavirus
Adeeb Ahamed,
CEO of Lulu Exchange
dubai — Currencies of emerging markets across Asia could weaken against the US dollar and currencies pegged to the greenback due to the impact of coronavirus. However, the Indian and Pakistani rupee could appreciate if the impact of Covid-19 prolongs and affects those countries directly, say analysts and industry executives.
The persistent uncertainties regarding what impact the coronavirus will have on the global economy, alongside the lack of clarity over how long it will take to find a cure, points to ongoing risks throughout emerging markets. European and other major currencies have skidded against the dollar but the Indian, Pakistani and Sri Lankan currencies are more or less stable and range-bound for quite some time.
In addition to the virus concern, lower oil prices and interest rates will also influence these currencies.
Jameel Ahmad, global head of currency strategy and market research at FXTM, said emerging market currencies have weakened against the US dollar this year, while safe-haven assets such as the US dollar, Swiss franc, Japanese yen and gold, are benefitting from the market uncertainty.