The firm's Singapore head of strategy for fixed income and currencies, Nizam Idris, spoke to Bloomberg TV earlier
- The US dollar will nudge higher against EM currencies from current levels
- US trade policy remains a concern
- There will be "some pressure" on EM currencies from a stronger dollar, rising yields
- Though the market is still quite far away from a crisis
- There's significant "sigh of relief" among investors in Asia on a trade truce
- But the relief was very cautious
- It will be "near impossible" for China to reduce trade surplus by $200 bn
A stronger dollar itself wouldn't be too major a concern to EM currencies in Asia considering how they performed against the greenback last year.
The real concern will be a combo from a stronger dollar as well as rising US Treasury yields. That will spark some concerns/debate among the attractiveness of assets in South East Asian countries like Indonesia and Malaysia - even more so than it already has.
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