11 Jun 2013
Flash: USD/Asia is poised for further upside - ANZ
FXstreet.com (Barcelona) - There are few reasons to be constructive on Asian currencies at the moment, says Khoon Goh, senior FX strategist at ANZ.
The fact that the appreciation on the RMB may be coming to an end, coupled with the ample liquidity support being in danger, it paints an scenario in which Asian currencies may struggle to perform well, Goh says.
Goh highlights the opposing directions the US and China are heading, with the Fed expected to start modest tapering to its asset purchase programme in Q4 this year, even sooner if labour market improvement is sustained, Goh says, while in contrast, "Chinese growth momentum continues to ease and further rate cuts are expected from the region" the strategist argues.
In conclusion, Khoon Goh sees "the continuation of a reallocation of capital from the periphery back to the core and this has further to run, which means USD/Asia is poised for further upside."
The fact that the appreciation on the RMB may be coming to an end, coupled with the ample liquidity support being in danger, it paints an scenario in which Asian currencies may struggle to perform well, Goh says.
Goh highlights the opposing directions the US and China are heading, with the Fed expected to start modest tapering to its asset purchase programme in Q4 this year, even sooner if labour market improvement is sustained, Goh says, while in contrast, "Chinese growth momentum continues to ease and further rate cuts are expected from the region" the strategist argues.
In conclusion, Khoon Goh sees "the continuation of a reallocation of capital from the periphery back to the core and this has further to run, which means USD/Asia is poised for further upside."