Asia FX: Oil shock seen manageable – BNY

FXStreet Insights Team FXStreet

BNY’s Geoff Yu argues that Oil near $95 is a shock for Asian energy importers but not a trigger for a broad balance-of-payments crisis. He highlights stronger current-account buffers in ASEAN and India, prior fiscal consolidation and lighter FX positioning as key supports, while urging monitoring of central bank intervention and reserve data to gauge any deterioration.

Asia FX resilience to Oil spike

"Oil at $95 is an FX shock, but not a broad Asia balance-of-payments crisis. ASEAN and India have stronger current-account buffers and lighter positioning, while the cleaner opportunity is in high-carry commodity FX such as BRL, CLP and ZAR. NOK may get oil-linked demand, but elevated holdings and limited Norges Bank buying cap the upside."

"A sharp rise in crude prices isn’t trivial for Asia’s energy importers. Taiwan and South Korea were already facing capital outflows on the financial account, and a lack of dollar liquidity will exacerbate currency weakness. However, we would not overplay the risk of destabilizing pressure or a financial-stability event."

"The region’s balance-of-payments position is also in relatively good shape. Official data indicate that in the run-up to the conflict, ASEAN and India were running the highest current-account surpluses in a decade. The reserve drain around the world in March was severe, and while this had a knock-on impact on government bond holdings globally, ultimately the process was manageable."

"Vigilance is warranted. As Bank Indonesia noted in Wednesday’s decision, the shock calls for “closer fiscal-monetary policy synergy” to bolster external resilience. Asia has made significant progress on this through Q2, and we expect that resilience to hold in the near term."

"Monitor Asian central bank intervention and oil-driven import pressure but treat Asia stress as manageable unless reserves or current-account data deteriorate."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD remains under presure above 0.7000; focus on data

AUD/USD has met some renewed selling pressure on Thursday, coming down from tops near 0.7040 to revisit the 0.7000 region ahead of the opening bell in Asia. The pair’s daily decline has come despite a lacklustre performance in the Greenback at the time when investors continued to monitor developments from the Middle East. Looking ahead, the release of flash PMIs will grab the attention in Oz at the end of the week.

USD/JPY declines to a one-week low; eyes trading range support near 157.50 on weaker USD

USD/JPY drops to a one-week low during Thursday’s Asian session, with bears now awaiting a break below multi-week range support near mid-157.00s before placing fresh bets amid a broadly weaker US Dollar. Despite bets for a December Fed rate hike and Middle East jitters, the recent decline in US bond yields keeps USD depressed near a three-week low. Moreover, hawkish BoJ expectations and intervention risks underpin the Japanese Yen, further weighing on the currency pair.

Gold remains offered just above $4,000

Gold prices resume their decline on Thursday, easing toward the area of two-month lows around $4,050 per troy ounce. Higher crude oil prices have reignited speculation of further tightening by the Fed, supporting the US Dollar and weighing on the precious metal.

The estimates keep falling: Why Bitcoin's quantum countdown is accelerating

The threat that Artificial Intelligence (AI) and quantum computing pose to Bitcoin (BTC) and cryptocurrencies in general is no longer a matter of if hardware will catch up; it is a matter of when. Advances in AI-assisted research are adding a new dimension to the quantum computing threat, although neither technology can currently break Bitcoin’s cryptography on its own.

The Bank of England just got its clearest reason to hike. Here's what it's really watching

UK inflation as measured by the CPI accelerated to 3.5% YoY in September, up from 3.1% in August, according to the Office for National Statistics. This is the highest level since October 2025, exceeding economists' expectations of 3.4% and pushing inflation further from the BoE's 2% target.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.