FXStreet reports that asian currencies dropped after the June FOMC meeting. Yet, economists at HSBC believe the smaller and more open ASEAN currencies should regain some lost ground later this year.

“We believe the smaller and more open ASEAN currencies, such as the SGD and MYR, should be able to regain some lost ground as markets re-focus on their vaccination progress and re-opening timelines.” 

“The higher-yielding currencies, such as the INR, may remain relatively more subdued because of the Fed impending tapering. For the RMB, domestic factors should be more dominant than the broad USD trend, in our view. In China, economic activity data for May was generally below consensus expectations. The RMB’s cyclical advantage has indeed narrowed. This will be reflected in rate differentials, current account dynamics (narrowing surplus), and capital flows (less inflows from foreigners, more outflows from locals).”