Better prospects of a US-China trade deal will help Asian currencies outperform
In particular, the Korean won has surged by 1.5% today to a one-month high against the greenback. The won already opened higher to begin with after the dollar’s woes yesterday but extended its gains following the more optimistic news of a US-China trade resolution.
And this sentiment is shared across the board in Asian trading so far as the Chinese yuan also trades to a 3-week high against the dollar. Here’s how the Asian bloc is performing against the greenback so far today:
As flows start moving out of the dollar and into risk-on/emerging market currencies, it will only serve to add more pain for the greenback as long as the healthier trade rhetoric keeps up.