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NEW DELHI: Asia may have five teams playing in Fifa World Cup 2018, but not as much clout.Yet the soccer World Cup has historically been positive for Asian currencies, with most regional currencies strengthening or stabilising in the four weeks to the final. Only the Indian rupee does not follow that rule; because it has its own!Since the 1978 World Cup, the domestic currency has been alternating between appreciation and depreciation at each World Cup, shows a study by DBS. In 2014, the rupee depreciated 0.3 per cent against the dollar. If history were to repeat, it should appreciate this time. The World Cup final will be held at Luzhniki Stadium in Moscow, on July 15.

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DBS says Northeast and Southeast Asian currencies have performed well in last three World Cups, but that had little to do with the victories of European teams.Asian currencies were led higher by a stronger Chinese yuan one year after its de-peg in 2005, and again in 2010, when the yuan resumed its appreciation after the global financial crisis, it noted.“Looking for consistency, the Singapore dollar and the Thai baht were the only Asian currencies that appreciated during every World Cup after the 1985 Plaza Accord. The Indian rupee has alternated between appreciation and depreciation in each World Cup since 1978. If this trend holds up, the rupee should strengthen this time around, after its fall during World Cup 2014,” DBS said.That said World Cup performance of a nation does not dictate outlook for its currency for the rest of the year. “For instance, post World Cup 2014, global crude oil prices collapsed from above $100 a barrel in the second half of 2014 and provided ECB with the deflation it needed to launch its quantitative easing programme in March 2015. The euro fell more than 10 per cent after the World Cup, while the Japanese yen also plunged on a second round of quantitative and qualitative easing measures,” the DBS note said.Asian countries’ poor showDBS noted that Asean countries mostly rank down under in Fifa rankings, and even the most successful Asian countries, Japan and South Korea, are ranked below 50.64693391
China, despite its massive investments in recent decades, remains at 75. In comparison tiny Iceland (population: 330k) ranks 20 and Bosnia (3.5mn) ranks 40.Not only are Asian footballing nations poorly ranked, they have by and large become worse over the past two decades, DBS added.”Countries from Eastern Europe and Central Asia have made significant progress since then, leaving far more prosperous and populous Asian economies behind. Clearly, while Asia is hard at work studying, building, and saving, something is getting lost in the exhilarating world of football,” it said.