'Tremendous' currency pressure tests Asia bond investors

HONG KONG -- The U.S. dollar's strength and bets that the Federal Reserve will delay interest rate cuts are turning up the heat on Asian bond investors, as local currencies in popular markets such as Indonesia and South Korea come under heavy depreciation pressure.

The Indonesian rupiah and South Korean won are among the region's worst-performing currencies, while the Malaysian ringgit has remained weak against the dollar since it touched a 26-year low in late February. The headwinds are buffeting local currency debt investors, who often need to hedge against foreign exchange risk.