Asian currencies recovered around the middle of last week after risk sentiment improved. The Indonesian rupiah (IDR) received supported as the central bank said that the current account deficit should narrow in the second half of this year. In addition, the central bank stated that further rate hikes are not needed, because inflationary pressures are expected to decline in 2014. An improvement in the trade balance and expectations that the current account deficit will narrow also benefited the Indian rupee (INR). Moreover, the Reserve Bank of India unexpectedly lowered the marginal standing facility rate by 50bp as it seeks to normalize the tight liquidity conditions. The Singapore dollar (SGD) was supported after Q3 GDP came in better than expected. The Monetary Authority of Singapore maintained its modest and gradual appreciation path of the S$NEER policy band as expected. We keep the Chinese yuan (CNY) as our top Asian FX pick due to its resilience to external shocks and policy makers’ preference for a slow and gradual appreciation of the currency.