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Asia-Pacific currency pairs vs the US dollar: What lies ahead?

By Debabrata Das

09:56, 13 April 2022

Faces on banknotes of the most dominant currencies in the world: Japanese yen, US dollar, Chinese yuan, Australian dollar.
While the Australian dollar (AUD) made big gains against the US dollar, the Japanese yen (JPY) was the biggest loser – Photo: Shutterstock

It has been a mixed start to 2022 for Asia-Pacific currencies. While the Australian dollar (AUD) made big gains against the US dollar, despite global uncertainties rising with the war in Ukraine, the Japanese yen (JPY) lost its safe-haven credentials and has been falling sharply.

The relatively stable Chinese yuan (CNH) also had an interesting first quarter in 2022, making strong gains before the People’s Bank of China (PBoC) stepped in and set a lower rate for the onshore yuan (CNY), pulling down the CNH. 

For the US / Singaporean dollar (USD/SGD) exchange rate, it has been a story of resilience – losing ground, but only marginally in the face of a strengthening US dollar. 

Let’s take a closer look at how the currencies fared and what lies ahead for them in 2022. 

The Aussie rules the pack

Chart showing AUD/USD exchange rate movements from 1.1.2022–12.4.2022AUD/USD exchange-rate movements from 1 January 2022 to 12 April 2022 – Credit/Source:

The AUD, commonly known as the Aussie, has made the biggest gains against the US dollar among currencies in the Asia-Pacific region. 

This year began on a sombre note for the Aussie. As divergences with regard to monetary policy tightening began to accentuate between the Reserve Bank of Australia (RBA) and the US Federal Reserve (the Fed), the AUD suffered.

However, after losing nearly 3% from the beginning of the year till 28 January, the Aussie's surge began. The AUD/USD exchange rate rose as high as 0.7577, more than 5% higher than the beginning of the year, by 5 April, before paring some gains in the last couple of weeks. 

The Aussie’s climb is unlikely to be halted for too long though. Analysts expect the currency to make sharp gains in the second half of the year as the RBA embarks on an aggressive rate hike cycle. 

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The yen is no longer safe

A chart showing USD/JPY exchange-rate movements from 1.1.2022–12.4.2022USD/JPY exchange-rate movements from 1 January to 12 April 2022 – Credit/Source:

Despite rising uncertainties in the global economy, the JPY lost big versus the US dollar.

One of the biggest surprise stories of 2022 has been the performance of the JPY. Long considered a safe-haven asset, the currency has been one of the worst-performing across the world since the war in Ukraine began, sparking off further uncertainties for the global economy.

Where the JPY has struggled has been in relation to Japan’s dependence on energy imports, the costs of which were rising, and its central bank being unable to tighten monetary policy as inflation-barring energy prices still elude the country. 


1.08 Price
+0.250% 1D Chg, %
Long position overnight fee -0.0080%
Short position overnight fee -0.0003%
Overnight fee time 22:00 (UTC)
Spread 0.00006


0.66 Price
+0.890% 1D Chg, %
Long position overnight fee -0.0073%
Short position overnight fee -0.0009%
Overnight fee time 22:00 (UTC)
Spread 0.00006


0.66 Price
+0.890% 1D Chg, %
Long position overnight fee -0.0073%
Short position overnight fee -0.0009%
Overnight fee time 22:00 (UTC)
Spread 0.00006


1.26 Price
+0.240% 1D Chg, %
Long position overnight fee -0.0046%
Short position overnight fee -0.0036%
Overnight fee time 22:00 (UTC)
Spread 0.00013

Analysts expect further weakness in the JPY as the US dollar strengthens on a back of a stronger economy, while talk of the central’s bank's intervention in the currency markets to stem the JPY’s decline has sparked more concerns than ease them. 

No mood for a strong yuan

A chart showing USD/CNH exchange-rate movements from 1.1.2022–12.4.2022USD/CNH exchange rate movements from 1 January 2022 to 12 April 2022 – Credit/Source:

While the markets see value for the yuan, the People’s Bank of China (PBoC) does not favour a stronger currency.

Another surprising story to emerge in the forex markets after the war in Ukraine broke out was the yuan. The tradeable offshore yuan (CNH) gained as the US and several European countries imposed sanctions on Europe.

Markets expected the CNH to be the saviour for Russia in foreign trade. Surprisingly, the PBoC let the markets play their part in strengthening the yuan. But being an export-driven economy, a weaker yuan is better for China and the PBoC’s patience soon wore out. 

Looking ahead, the PBoC will not need to do much to reign in the yuan’s strength. Analysts expect the Covid-19 outbreak and a slowing economy to put the brakes on the yuan’s rise. 

Singaporean dollar stays resilient

A chart showing USD/SGD exchange-rate movements from 1.1.2022–12.4.2022USD/SGD exchange-rate movements from 1 January 2022 to 12 April 2022 – Credit/Source:

Though it is lower than at the beginning of the year, the Singaporean dollar (SGD) has limited its losses versus the US dollar (USD).

Despite being caught in a situation where its central bank, the Monetary Authority of Singapore, has to tighten monetary policy even as economic growth slows down,, the Singaporean dollar has remained resilient to the rising strength of the US dollar.

Though it has lost ground, the SGD is only down a little over 1% to the USD since the beginning of the year. However, analysts expect the resilience of the SGD to break in the months ahead on the back of weakness in other Asian currencies, especially as growth slows while inflation keeps rising. 


Markets in this article

0.66071 USD
0.00582 +0.890%
7.16475 USD
-0.00916 -0.130%
143.846 USD
-3.397 -2.310%
1.33699 USD
-0.00502 -0.370%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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