Darkness descends on developing Asia’s currencies

TOKYO – The falling Japanese yen and Chinese yuan may be getting all the headlines, but the real currency calamity is brewing under the radar elsewhere – in developing Asia.

“Along with the broader emerging market currency complex, high-yielding currencies like the Philippine peso, Indian rupee and Indonesian rupiah have been under pressure in June,” says Goldman Sachs strategist Zach Pandl.

“In coming weeks, we expect this pressure to continue versus the dollar, in some cases potentially posing upside risks to our dollar-cross forecasts,” he said.

Such concerns, though, could be the proverbial tip of the iceberg as the US Federal Reserve accelerates a tightening cycle that by some estimations is only just beginning.