Factors driving the divergence between the performance of north and south Asian currencies will have less of an effect due to the renewed upswing of oil prices, say economists in the first issue of HSBC's Asian Currency Insight. This means that Asian currencies enjoying an upswing may not for much longer.
Why the divergence
Rising US interest rates increased the burden of debt repayments in debt-laden countries such as Indonesia, Thailand and the Philippines. Whilst the hike was not positive for north Asia, strong global growth associated with the rate hike continued to boost the performance of strong industrial exporters like China.
In short, say HSBC economists, the rise in US rates acted...