Emerging Asian Currencies Grab Investor Attention
London: 30 November 2023 (TraderMade): Investors are expressing optimism towards emerging Asian currencies, with bullish sentiment prevailing in the wake of changing expectations for US interest rates. As per a recent Reuters poll conducted on Thursday, the weakening of the US dollar has prompted a surge of interest in riskier assets across the region.
Key Takeaways:
- South Korean won, Taiwanese dollar, and Philippine peso are at their highest levels since 9 February.
- Long positions on the Singapore dollar and Indonesian rupiah have reached a four-month high.
- Market participants anticipate prolonged weakness in the US dollar, influenced by recent economic data suggesting the conclusion of interest rate hikes by the US Federal Reserve.
- The US dollar index, measuring the currency against six rivals, has lost nearly 0.6% in November, aiding the recovery of emerging Asian currencies.
The Taiwan dollar has shown resilience, strengthening over 3.5% in November and marking its best month in a year. Political uncertainties in Taiwan have contributed to volatility in the local currency.
The Indian rupee, Chinese yuan, and Malaysian ringgit have seen improved sentiment. The Malaysian ringgit, in particular, faces pessimism among investors. Recent doubts about the demand for palm oil and other commodities have weakened confidence in the local unit.
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