In a recent speech, a high-ranking Australian central banker discussed the prospect of Asia forming a union similar to that of the EU and adopting a common currency. Glenn Stevens said such a union is extremely unlikely, because the economies of Asia are too diverse. There are already several multilateral trade and currency agreements that link much of Southeast Asia, leading many pundits to speculate that a common currency represents a logical next-step. However, at this point in time, it seems these nations’ respective monetary policies are sensitive to the US, rather than to each other. Dow Jones News reports:

Wile there have been various calls for a common exchange rate policy, usually based around targeting a common basket, divergent interests within Asia prevent finding an obvious acceptable exchange rate linkage.

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