Mitsubishi UFJ Analyst Warns of Prolonged Middle East Conflict Impact on Asian Currencies

According to Jin10, Lloyd Chan, a senior currency analyst at Mitsubishi UFJ Bank, has indicated in a research report that recent developments suggest the Middle East conflict may become prolonged. Chan noted that risk aversion, coupled with high energy prices, could elevate U.S. inflation and maintain U.S. interest rates at high levels for an extended period, thereby supporting the U.S. dollar and increasing resistance for risk-sensitive assets. Chan highlighted that Asian currencies such as the Indian rupee, Philippine peso, South Korean won, and Thai baht are particularly vulnerable due to their reliance on imported energy and sensitivity to high oil prices through inflation and current account channels. Data from the London Stock Exchange Group shows that the U.S. dollar rose by 0.5% against the Philippine peso, reaching 60.763, after hitting an intraday record high of 60.776 earlier.