AI Overinvestment Concerns and Rising Oil Prices Create Dual Headwinds for Asian Currencies
nashnova research
Doubts over AI capital-spending returns and climbing crude prices are dragging down the Taiwan dollar, Philippine peso, and other Asian currencies; active intervention by South Korea's and India's central banks is splitting the field, making central-bank policy space the key short-term variable.
AI spending is surging — where are the returns?
Hyperscale cloud providers keep raising capex, but the path to profit is growing murkier. Meta posted its first negative free cash flow since going public in the July–September quarter.
The Philadelphia Semiconductor Index — the benchmark tracking major global chip stocks — has fallen roughly 15% since October. That volatility travels through TSMC's share price straight into the Taiwan dollar.
This means → Investors aren't souring on AI itself; they're asking "when does this round of spending pay back?" The hazier the answer, the faster capital exits Asia's semiconductor chain first.
How does rising oil hit Asian currencies?
Most Asian economies rely heavily on energy imports. Higher oil prices push up import bills and domestic inflation, triggering currency sell-offs.
The Philippine peso hit 64 per US dollar on Monday — an all-time low. The central bank announced a rate hike on Thursday, but with inflation already above 7%, markets see the response as too late.
Toru Nishihama, chief economist at the Dai-ichi Life Research Institute, noted: "The Philippine central bank was too cautious with earlier hikes; monetary policy has clearly fallen behind inflation."
In plain terms = oil rises → import bills swell → the local currency gets sold, and a central bank that hikes too slowly cannot break that chain.
Why is the Taiwan dollar taking the first hit?
The Taiwan dollar slid past 32 per US dollar, its weakest level in roughly eighteen months.
Takahiro Hori, senior market economist at Mizuho Bank, said: "Uncertainty from the US equity correction is spilling into the Taiwan dollar through falling Taiwanese stocks."
This reflects how tightly Taiwan's economy is bound to the global semiconductor cycle — the moment AI-investment sentiment cools, the Taiwan dollar has almost no buffer.
What is keeping the won and the rupee on a different path?
The Korean won touched 1,319 per US dollar on Monday — its strongest in nearly two years — even as KOSPI has fallen about 40% from its June peak. The Bank of Korea held its benchmark rate at 3% but explicitly kept a further hike on the table, sending a hawkish signal.
The real anchor is the trade account: South Korea posted a record trade surplus of roughly $50 billion in September; memory-chip demand is giving the won fundamental support.
The Indian rupee dipped past 96 per US dollar early this month, then recovered to around 94. The Reserve Bank of India intervened by supplying dollars to state-owned oil firms and curbing currency-derivatives trading.
Shinya Harui, senior FX analyst at Nomura, noted: "Every time the RBI steps in, the rupee gets bought — but that bid lacks staying power."
When does this pressure ease?
AI-investment fears and elevated oil prices are unlikely to fade soon; emerging Asian currencies still face sustained selling risk.
This means → two things to watch next: whether US tech giants' upcoming earnings can prove AI spending is paying off, and whether oil prices pull back enough to ease Asia's import burden.
Central-bank policy space and willingness to intervene are the decisive variables — banks with trade surpluses and room to hike can hold their currencies steady; the rest stay under pressure.
市场有风险，内容仅供研究参考，不构成投资建议。