An exchange rate is how much one currency is worth in terms of another. For Asian investors, the USD exchange rate is especially important.
Key Asian Exchange Rates
All major Asian currencies are quoted against the US Dollar:
- USD/JPY ~150: 1 dollar buys 150 yen
- USD/CNY ~7.2: 1 dollar buys 7.2 yuan
- USD/INR ~83: 1 dollar buys 83 rupees
- USD/KRW ~1,350: 1 dollar buys 1,350 won
What Moves Exchange Rates
- Interest rate differentials: higher rates attract foreign capital → currency strengthens
- Trade balance: export surplus → currency strengthens (more demand)
- Inflation: higher inflation → currency weakens
- Capital flows: foreign investment → currency strengthens
Impact on Stocks
A weaker currency helps exporters (Toyota benefits from weak yen) but hurts importers. For foreign investors, currency moves can amplify or erase stock gains.