Big Take Asia The Dollar’s Dominance Is Unwinding in Asia
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May 27, 2025 Ruth Carson, Bloomberg's foreign exchange market expert based in Singapore, delves into the shifting dynamics of currency in Asia. She discusses the significant surge of the Taiwan dollar, its impact on neighboring currencies, and how this trend signifies a broader move away from reliance on the US dollar. Carson highlights the implications for local industries like TSMC, trade negotiations, and the potential rise of alternative currencies in the region. The conversation uncovers how these changes may reshape financial strategies and economic structures across Asia.
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Taiwan Dollar's Historic Surge
- The Taiwan dollar surged 3% against the US dollar in a single day, the biggest gain since 1988.
- This caused a ripple effect, lifting other Asian currencies and weakening the US dollar in the region.
Reverse Asian Financial Crisis?
- The Taiwan dollar's surge sparked fears of a reverse capital flow into Asia, unlike the 1997 crisis.
- Investors began reconsidering the dollar's dominance, possibly triggering big shifts in capital flows.
Asia's Post-1997 Strategy
- The 1997 Asian financial crisis taught Asia to amass high-quality US dollar assets to avoid repeat debt crises.
- This strategy led to Asian nations building huge US assets, reinforcing dollar dominance for decades.