Latest news with #deDollarisation
South China Morning Post
04-07-2025
- Business
- South China Morning Post
De-dollarisation favours Asian assets despite record US stock run, Societe Generale says
The rotation to emerging markets in Asia that spurred the US dollar's worst performance in more than five decades will probably continue, as a de-dollarisation trend outweighs a record rally in US stocks, according to Societe Generale. Global investors had turned cautious about their estimated US$62 trillion in dollar-based assets – equivalent to the size of the Nasdaq – as the Trump administration's 'reciprocal tariffs' eroded the status of the world's reserve currency, analysts led by Frank Benzimra at the French bank said in a report on Friday. Also reducing the appeal of the dollar were a potential softening of US growth and the recent retreat in the price of crude oil, which is denominated in the US currency, according to the report. 'We acknowledge that US exceptionalism is diminishing and that de-dollarisation is under way,' said Benzimra, the bank's Hong Kong-based head of Asian equity strategy. 'As the resilience of the [US] economy is expected to wane, the risks to Treasury yields are skewed to the downside.' Societe Generale's call added to a drumbeat for selling US assets that started when the tariff war sowed global distrust in the dollar and a ballooning US budget deficit triggered currency debasement concerns. The pivot may have a profound impact on the global investment landscape, reversing years of outperformance by US assets. The US dollar index dropped 11 per cent in the first six months, the worst start to a year since 1973. In Asia, the Taiwan dollar appreciated the most versus the US currency, with a 14 per cent gain. Japan's yen strengthened 8.7 per cent, and South Korea's won advanced 7.8 per cent. The MSCI Asia-Pacific Index, a broad gauge of stock markets in the region, has risen 12 per cent this year, almost doubling the gain in the S&P 500.
South China Morning Post
30-05-2025
- Business
- South China Morning Post
Asia diversifies from US dollar with Chinese yuan, gold, bitcoin driving change
A growing number of Asian economies are cautiously moving away from the US dollar by creating alternative trade agreements and increasing their investments in assets such as gold and digital currencies – a trend that analysts say signals a longer-term shift toward a more multipolar monetary system. A recent study by foreign exchange platform Forex Complex pointed to three primary indicators of de-dollarisation: a reduced share of US dollars in national reserves, a rise in gold's share, and growing use of alternative currencies in bilateral trade. Singapore , Indonesia and Japan ranked among the top 10 countries making the most progress on this front. 'Asian nations are increasingly seeking to reduce reliance on the US dollar, especially in response to sanctions, tariffs, and rising geopolitical risks,' said Chris Lodge, vice-president at foreign exchange brokerage FXTM. While the dollar continues to dominate global markets – accounting for nearly half of SWIFT payments and over 80 per cent of foreign exchange trades – Lodge said diversification efforts are gaining traction in Southeast Asia , the Middle East , and among Brics members. In Asia, more transactions are being conducted in Chinese yuan , followed by the euro and Emirati dirham in select bilateral arrangements, he added.
South China Morning Post
07-05-2025
- Business
- South China Morning Post
Taiwan currency's surge a ‘warning shot' for Asia's de-dollarisation: analysts
The New Taiwan dollar's recent surge, along with the appreciation of other Asian currencies, suggests a deepening of regional de-dollarisation as investors rethink their investments in the US currency amid Washington's 'extremely predatory' behaviour towards foreign countries, analysts said. Advertisement Economies like Taiwan, with a historically high exposure to assets denominated in US dollars, have taken a foreign exchange-led hit after the American currency weakened in recent weeks, wrote Francesco Pesole, foreign exchange strategist at Dutch bank ING, in a note on Tuesday. 'Local players are now seeking greater US dollar hedging, as well as starting to diversify away from US investments.' The shift from US assets is likely to contribute to the continued devaluation of US dollars, supporting a 'bearish narrative' for the currency, Pesole added. The New Taiwan dollar's surge hit a pause on Tuesday, closing at NT$30.28 to US$1 from Monday's NT$30.145 – ending a strengthening streak observed since April 24. It traded at NT$30.244 as of Wednesday afternoon. Advertisement Taiwan's central bank published a statement on Monday urging manufacturers to remain calm and avoid 'dumping US dollars due to irrational expectations based on over-exaggerated or untrue analyses in the market'.
South China Morning Post
07-05-2025
- Business
- South China Morning Post
Taiwan dollar surge ‘a warning shot' in Asia trend towards de-dollarisation: analysts
The New Taiwan dollar's sudden surge in recent days, along with the appreciation of other Asian currencies, highlights the prospect of deepening regional de-dollarisation as investors rethink their investments in the US currency amid Washington's 'extremely predatory' behaviour towards foreign countries, analysts said. Advertisement Economies like Taiwan, that historically have very high exposure to assets denominated in US dollars, have taken a foreign exchange-led hit after the currency weakened in recent weeks, wrote Francesco Pesole, foreign exchange strategist at Dutch bank ING, in a note on Tuesday. 'Local players are now seeking greater US dollar hedging as well as starting to diversify away from US investments.' The shift away from US assets will likely contribute to the continued devaluation of US dollars, supporting a 'bearish narrative' for the currency, Pesole added. The New Taiwan dollar's surge hit a pause on Tuesday, closing at NT$30.280 to US$1 from Monday's NT$30.145 – ending its jump since April 24. It traded at NT$30.244 as of 2.50pm on Wednesday. Advertisement Taiwan's central bank published a statement on Monday urging manufacturers to remain calm and avoid 'dumping US dollars due to irrational expectations based on over-exaggerated or untrue analyses in the market'.
