The Bloomberg-JPMorgan Asia Currency Index, a tradable over-the-counter futures contract referenced to 10 Asian currencies, reached new highs last week on continued regional strengthening against the U.S. dollar. The overall benchmark index has shifted up 2% to the 106 level.
"It's at its highest point right now," said Yen Ping Ho, fx strategist at JPMorgan in Singapore, attributing this to Korea and Thailand both strengthening by around 5% year-to-date against the dollar and other currencies gaining momentum including Singapore and Taiwan. "This is a broad-based move," added Ho.
The quarterly ADYX contract was launched in late 2004 by the bank to easily monitor and hedge regional currencies as a whole and also acts as the reference tool for structured products (DW,10/28/04). Ho expects continued gains in Asia this year on the back of strong fundamentals and investment inflows, and forecasts the index hitting 110 by year-end.
