“Timing the peak of USD is not straightforward, but on balance, the USD will crest as and when there is more clarity on Fed terminal rates, around 3- to 6-months from now,” analysts including Danny Suwanapruti wrote in a Sunday note. Once the USD has turned, diverging current accounts, FX reserves replenishment and equity-market inflows will drive the diverging path for non-Japan Asian currencies, they wrote.

The US bank said it’s bullish on the South Korean won and Singapore’s dollar. Among the high-yield markets in Asia, it’s “most constructive” on the Indonesian rupiah, given the nation’s improved external position and record low foreign holdings. It expects the currencies of Malaysia, India and the Philippines to underperform.

The debate over the timing of the dollar’s peak is intensifying as the Fed’s policy tightening is set to end next year. Morgan Stanley this month said the US dollar should peak this quarter and will decline in 2023. In Asia, the prospect of China’s reopening has given a boost to currencies this month, though they pared some of those advances amid reports of higher Covid cases.