OCBC strategists Sim Moh Siong and Christopher Wong forecast mixed moves in Asian foreign exchange as a fragile US–Iran ceasefire cools oil prices from recent highs, but does not remove tensions. They describe the situation as a fragile pause rather than a clear de-escalation.
They expect oil-sensitive currencies to face pressure, naming the Indonesian rupiah (IDR), Indian rupee (INR), Philippine peso (PHP) and Thai baht (THB). They also note fresh tensions linked to the UAE and the Strait of Hormuz.
Fragile Ceasefire And Oil Risk Premium
They see AI and technology-linked currencies holding up better, including the Taiwan dollar (TWD) and South Korean won (KRW). They add that the Malaysian ringgit (MYR) may also be firmer to some extent.
The report says oil eased from recent highs after the ceasefire appeared to hold, despite earlier exchanges of fire. The article states it was produced using an artificial intelligence tool and reviewed by an editor.
We are seeing the US-Iran ceasefire hold for now, which has brought oil down from the crisis highs we witnessed in 2025. However, the de-escalation feels fragile, and persistent tensions around the Strait of Hormuz keep a risk premium on energy prices. Brent crude has stabilized around $85 a barrel this quarter, a level that still poses a challenge for energy-dependent economies.
This environment suggests continued pressure on oil-sensitive currencies like the Indonesian Rupiah and the Indian Rupee. The Indian Rupee, for example, has depreciated over 1% against the dollar since the start of the year, now trading near 84.50. Traders should consider strategies that benefit from this weakness, such as buying puts on the Philippine Peso or Thai Baht to hedge against stubborn import-driven inflation.
Relative Value Trades Without Usd Exposure
In contrast, currencies linked to the artificial intelligence and tech sectors are showing underlying strength. Taiwan’s export orders for electronic components surged by 15% year-over-year in the first quarter of 2026, fueling demand for the Taiwan Dollar. We believe selling out-of-the-money USD calls against the TWD or the Korean Won could be a viable strategy to capitalize on this durable tech demand.
The most direct approach may be through relative value trades that remove the US dollar from the equation. We see potential in using non-deliverable forwards to establish a long position in the Taiwan Dollar against a short position in the Indian Rupee. This type of derivative structure isolates the divergence between the strong AI-driven export cycle and the ongoing burden of high energy import costs.
