Asian Currency Short Bets Rise on Energy Price Worries
Short bets on Asian currencies rose as the Middle East conflict raised energy prices. The Indian rupee hit a record low while the Korean won hit a 17-year low.
Investors are increasing their bearish bets on Asian currencies as a widening conflict in the Middle East involving the United States, Israel, and Iran stokes fears of a severe energy shock. The paralysis of shipping through the Strait of Hormuz has led to a sharp rise in the prices of Brent Crude Oil and Natural Gas, threatening to unleash a wave of inflation across the region.
A recent Reuters poll indicates that short positions on most regional currencies have crept higher. The won in South Korea recently fell to its weakest level since 2009, while the currency of Taiwan hit its lowest point since last May. In India, the rupee slumped to a record low of 92.3025 per dollar. Similarly, the currencies of Thailand and the Philippines have retreated to multi-week lows.
