At Any Rate Global FX: Late-week shocker jolts FX
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May 2, 2025 In this engaging discussion, Arindam Sandilya, co-head of FX strategy in Singapore, dives into the surprising decline of the USD against the Taiwanese dollar and its ripple effects on Asian currencies. He analyzes shifts in the Chinese Yuan's role in global markets and how recent tariff changes impact the US dollar among G10 currencies. Sandilya also shares insights on central bank policies, specifically the European Central Bank and Bank of England, and their implications for currency valuation. A must-listen for FX enthusiasts!
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Historic USD/TWD FX Shock
- A historic 6% one-day drop in the USD/TWD indicates major FX market disruption in a normally stable currency block.
- This event may signal a broader trend affecting Asian FX and possibly global finance.
China's Easing FX Stance
- The CNY has softened its resistance to appreciation within Asia despite tariff tensions.
- Changing PBOC fixing behaviors and negotiation headlines suggest potential CNY strength participation in Asia FX moves.
FX and Growth Implications of Tariff Talks
- A potential tariff rollback deal and regional currency moves could boost European growth and the euro.
- This scenario broadens dollar weakness beyond Asia and reduces recession fears, favoring cyclical currencies like the Aussie dollar.