Most Asian currencies weakened as Brent rose towards USD120 per barrel, adding to inflation risks and a shift towards a more hawkish Federal Reserve outlook. Concerns about demand destruction also weighed on sentiment.<\/p>\n
Moves were uneven across the region. The South Korean won faced fresh pressure, while the Philippine peso and Thai baht, which are more sensitive to oil prices, continued to trade lower.<\/p>\n
China\u2019s renminbi held up better than peers, even though it also softened against the US dollar. The main focus remained oil supply and pricing.<\/p>\n
Ongoing US\u2013Iran tensions were linked to a tighter oil market and the risk of further increases in oil prices. This could continue to weigh on Asian currency performance.<\/p>\n
Reports cited preparations to extend a naval blockade on the Strait of Hormuz until a nuclear deal is reached, while CNN reported that Iran may submit a revised plan soon. The situation was described as fluid, and any easing of tensions and oil prices could reduce depreciation pressure on Asian currencies.<\/p>\n
We are seeing a familiar pattern emerge, reminiscent of the oil shock we saw back in 2025 when tensions in the Strait of Hormuz flared up. With Brent crude currently holding firm near $95 a barrel as of May 1, 2026, the pressure on Asian currencies is building once again. The Federal Reserve\u2019s hawkish stance, reinforced by last week’s non-farm payrolls report which showed unexpected strength, continues to support the dollar.<\/p>\n
The impact remains uneven, creating clear opportunities for pair trading. The currencies of major oil importers, like the South Korean Won, are showing significant strain, with USD\/KRW now testing the 1380 level. The Thai Baht and Philippine Peso are similarly vulnerable to any further oil price spikes, a dynamic we also witnessed last year.<\/p>\n
This environment suggests traders should consider buying volatility on the most sensitive pairs. Implied volatility in USD\/THB options has already climbed over 12% in the last month, but it remains below the peaks seen in 2025, suggesting there is still room to move. Strategies like long straddles could prove effective to capitalize on a significant move in either direction.<\/p>\n
The Chinese Renminbi is not the reliable anchor it was previously. While it has been more resilient than its regional peers, recent weak export data from China is causing concern about its stability. This makes using it as a funding currency to go long on other Asian FX a much riskier proposition than it was a year ago.<\/p>\n
We are watching geopolitical developments closely, as any signs of de-escalation between major powers could see oil prices ease and reverse these trends quickly. Traders can use options to define their risk, such as buying USD call spreads on pairs like USD\/PHP. This provides upside exposure to continued currency weakness while capping the premium spent if the situation suddenly improves.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Asian currencies mostly weakened as Brent neared $120, stoking inflation and hawkish Fed expectations amid Iran tensions.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-46345","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/46345","targetHints":{"allow":["GET","POST","PUT","PATCH","DELETE"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=46345"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/46345\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=46345"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=46345"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=46345"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}