Deutsche Bank research team writes - monsoon rains can have a strong influence on Asian currencies - for AMarkets materials.
Moreover, the weather can be in the short term the most powerful driver for Asian currencies. Monsoon rains La Niña will provoke inflation and rapid growth will lead to a weakening of the currency. Organization of National Oceanic and Atmospheric Administration has announced that the La Niña phenomenon is on the way. The phenomenon that occurs due to the difference in temperature on land and in the ocean, accompanied by an unusually rainy weather. The most obvious economic impact - food price inflation. Food - the main component of the CPI in the Asian countries. Until recently, the ball is in the Asian atmosphere usually quite different weather phenomenon - the twin brother of El Niño (Only with a minus sign). Prices of fruits and vegetables increased significantly.
According to experts Deutsche Bank, the increased humidity on the weather pattern La Niña could lead to lower prices for food and meat, which is positive for China, Hong Kong, Korea, Taiwan. Inflation in the region will fall.Banks may cut rates. It will shrink the spread with US interest rates, and this will be conducive to strengthening of USD against Asian currencies. Currency China, Taiwan, South Korea, Malaysia and the Philippines will weaken, not bad for exporters of these countries. The only country that may not be able to benefit from the effect of La Niña - Thailand, which the authorities plan to fix the price of grain.