Asian currencies have been roiled by an unexpectedly stronger US Dollar this year, but we do not equate this to the Asian Financial Crisis of 1997. Most Asian countries are better positioned than before to weather currency volatility and temporary higher oil prices, due to stronger fundamentals and more flexible exchange rates. However, the effect of a weaker Renminbi could last longer as economic growth slows and given China is the biggest trading partner for most countries in Asia and Australia except India. We stay away from local rates except Singapore Dollar due to the deep local investor base and keep our call for Asian Investment Grade USD bonds due to strong technicals.

This episode is presented by Magdalene Teo, Head of Fixed Income Research Asia at Julius Baer.