As the U.S. dollar looks set to continue its reign over global currency markets, some of Asia's emerging market currencies are more at risk than others, analysts say.
"Fear of the Federal Reserve is too big a risk in the near term. Strong employment data or indications from the Fed that rate hikes are imminent might push Asian currencies lower," according to a Societe Generale note published on Thursday.
Dollar bulls have been on a run since last summer, pushing the dollar index to 11-year highs. Despite some weak U.S. economic data including the latest consumer spending and factory activity, the Fed is widely forecast to raise interest rates sometime between June and October.
In Asia, some currencies are more vulnerable than others, analysts warned. Indonesia's rupiah tops the danger list, but investors also need to watch the Taiwan dollar.
Rupiah at risk
Euphoria around the election of President Joko Widodo last July sparked a rush into Indonesian assets, but that momentum appears to be reversing after the central bank surprised markets with a 25-basis-point rate cut to 7.5 percent mid-February – its first cut since 2011.
The central bank conceded that lower oil prices would damp inflation, raising concerns that more rate cuts could follow.