Story from Bloomberg with Roy Teo, currency strategist from LGT Bank in Singapore
Emerging Asian currencies have done very well this year. Against the greenback, majority of them have seen gains that not many would have expected at the start of the year given that the Fed is marching forward with its tightening cycle.
The story here that LGT Bank is arguing comes from the perspective that China may face the prospect of slower growth and US tax reform is likely to boost the dollar in the coming months.
It goes on to say that "if you have some profits, there's no harm in taking some money off the table".
While somewhat true (certain currencies do look like they are due for a retracement), the fact that the long-end of US yields is failing to pick up despite the Fed's rate hike cycle being on track is making it hard for investors to ignore the fact that the longer tenor assets in Asia is still relatively attractive.
Hot money will always move towards markets with the highest yields, and until US yields start pushing higher, there's always a reason for investors to keep their money in the other region of the world.
Asian currencies performance in 2017 thus far.
