Asian FX: Dollar strength caps RMB-led optimism – OCBC

OCBC's strategist Christopher Wong says Asian FX remains constrained by a firm Dollar and higher US yields, despite some optimism around US–China talks. The Renminbi (RMB) is the main outperformer on lower USD/CNY fixes and policy-tolerated appreciation, but broader Asia FX stays soft. The bank characterizes the backdrop as measured, selective optimism rather than a broad regional rally.

Selective RMB resilience versus softer Asia FX

"The FX read-through was less clear-cut."

"Better US retail sales data reinforced the resilience of the US consumer and saw markets price in around a 23% probability of a 25bp Fed hike by Dec-2026, lending support to the USD and weighing on most major and Asian FX."

"RMB was the key exception, staying resilient on US–China optimism and policy-tolerated appreciation signals."

"For now, this points to measured and selective optimism on RMB rather than a broad Asia FX rally."

"US–China tail risks have eased at the margin, but higher US yields and a firmer USD remain key constraints for Asian FX."

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