Asia FX Shift: Joint Intervention Sparks Aussie Underperformance

For years, emerging Asia FX has underperformed in comparison to other regions. However, recent events may signal a shift towards stronger performance for currencies such as the yuan and rupee.

The joint US-Japan intervention aimed at supporting the yen has effectively removed its divergence from the rest of Asia FX. As a result, the currencies of Asia's largest economies are moving in tandem against the greenback.

The Australian dollar, often used as a proxy for emerging Asia, may start to underperform against regional currencies if investors redeploy capital across the region.