The broad USD corrected after making a fresh cycle high in mid-May, which helped some Asian currencies. Notably, the SGD, managed to appreciate modestly in May. The SGD is supported by the Monetary Authority of Singapore’s (MAS) appreciation bias and its strong underlying fundamentals (current account surplus, capital inflows). We think the MAS’s tightening cycle is not over, and so the SGD remains one of our top picks in Asia.

The THB also regained some ground against the USD. Now that the dividend ‘season’ is nearly over (Thailand companies tend to concentrate their dividend payouts in April, May, and September), we think the currency may continue to outperform on portfolio inflows, as optimism about a tourism recovery rises. Thailand reportedly saw an acceleration of visitor arrivals in the first half of May, after entry rules for vaccinated tourists were relaxed (Thaiger,17 May 2022).