FX Strategy: Sticking With Safety

We are short-term bullish the Singapore and Taiwanese dollars, calling for a relief rally following the sharpest selloff since the Asian financial crisis. Medium term, though, the tide looks to be turning for Asia FX on the whole as export growth slows and monetary policy turns more dovish. We continue to favour the SGD and TWD, highlighting the potential for a major bullish reversal versus the NZD, AUD, and further gains versus the IDR and INR. A sharp selloff in the CNY is also becoming increasingly likely.

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