How the Fed tapering jitters impacted Asian currencies

How long will it threaten Asia?

According to DBS, the Fed tapering fears and volatility in Asian currencies revealed a need for more reforms and restructuring, and less complacency in the region. 

It’s mostly case of jitters about QE and a perception that growth in the G3 ‘is back’. Capital is flowing out of the region for both reasons.

Here's more from DBS:

Our regional strategist says with regards to the cyclical part of the flow, adjustments will have to be made. 

The liquidity that flooded Asia due to the near-zero US interest rates policy and QE3 was never going to last.

At some point, the US and Europe economies would recover and central banks would normalize policies. Those flows are going home, if probably a bit too soon.

Asia and emerging market equities have underperformed developed markets in recent months and this trend is likely to continue. 

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