FXStreet (Delhi) – Khoon Goh, Research Analyst at ANZ Research, suggests that while a delay in Fed rate hike expectations may have been the catalyst for the sharp rally in Asian currencies this week, we do not believe this is the start of a turnaround.
Key Quotes
“The moves largely reflected market positioning, exacerbated by a lack of liquidity in some markets.”
“We still see challenging times ahead for Asian currencies as slowing growth; deleveraging and prospects for further policy easing ultimately see depreciation pressure return.”
“Therefore, we recommend initiating long positions in USD/KRW and USD/TWD, as we see these two currencies as most vulnerable – particularly to a slowdown in China.”
“We also recommend going long PHP against SGD ahead of the MAS meeting, were we expect a re-centring of the policy band to the prevailing S$NEER level.”
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