KUALA LUMPUR — The current-account deficit is making a comeback as a reason to sell some Asian currencies, according to Credit Suisse Group AG and Neuberger Berman Group LLC.

US President Donald Trump’s order to impose metal tariffs last week added to the pressure which Asian exchange rates are already facing this year from a hawkish Federal Reserve and rising Treasury yields.

While a trade war is unlikely to break out, inflows into risk assets will be stymied, shining the spotlight on countries needing funds to narrow their deficits, said Trang Thuy Le, a macro-strategy analyst at Credit Suisse in Hong Kong.

“Deficit currencies such as Indonesia’s rupiah, India’s rupee and the Philippine peso are likely to be more vulnerable just because they need funding for their current-account deficits, and the environment is not supportive for portfolio flows,” said Mr. Trang.

“India and Indonesia also have had large inflows into their respective markets recently, so they are at risk of a reversal.”

India and Indonesia have recorded current-account deficits since 2005 and 2011 respectively, while the Philippines expects to post a third straight annual shortfall this year.

“The currencies which are likely to underperform are either higher-beta currencies like the won, or those of the economies which are running current-account deficits and are higher yielding with significant foreign positioning,” said Prashant Singh, a Singapore-based senior portfolio manager for emerging markets debt at Neuberger Berman, which oversees $295 billion globally.

“So the likes of the rupiah and the Indian rupee would have typical deterioration pressure.”

Since the US Commerce Department recommended imposing tariffs on steel and aluminum imports in mid-February, all but three of Asia’s currencies have weakened. The rupiah’s slide of more than 1.5% is among the biggest. While Indonesia isn’t a notable exporter of those metals, its currency is often seen as a bellwether for how investors view the region given that foreigners own almost 40% of rupiah-denominated government debt.

Bank Indonesia has vowed to continue intervening to support the rupiah as the yield on 10-year notes surged last week to the highest level since November. While jitters over a trade war eased after the US agreed to exempt some countries from the metal tariffs, investors are still wary as China warned it would defend its interests. — Bloomberg

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