Asian central banks - focus is again on trade-weighted exchange rate

Central banks across Asia have raised concern over the past week about trade-weighted currency appreciation weighing on export competitiveness and leading to tighter monetary conditions domestically. 

This comes amid weak external demand that has resulted in dismal export data for most Asian economies in the first four months of the year. 

Asia ex-Japan (AXJ) currencies that have posted strong gains on a trade-weighted basis (particularly the Indian rupee and the Thai baht) is expected to remain under pressure. 

"We expect further monetary easing in countries such as Indonesia, where Q1 growth was disappointing. We therefore see upside to USD-IDR and maintain our mid-2015 forecast at 13,700", says Standard Chartered.