Morgan Stanley has warned that Asian currencies are poised for more losses in the short term as investors have consistently underestimated risks stemming from the Ukraine war. Analysts including Min Dai and Belle Chang explained that a combination of geopolitical uncertainty and higher oil prices should lead to higher inflation and lower growth in Asia. Major oil-importing nations such India and the Philippines have been among the hardest hit. The Wall Street-bank has lowered most of its Asian currency forecasts for the next three months. Morgan Stanley advises investors to go long on the offshore yuan against the rupee as India's currency is sensitive to oil prices. The bank also recommended buying the Japanese yen against the South Korean won and added a long Malaysian ringgit versus the Thai baht trade to its portfolio.
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