Latest news with #KhoonGoh
CNA
5 days ago
- Business
- CNA
CNA938 Rewind - Stock take today: China-US in focus, ECB trims rate, Asia week ahead
CNA938 Rewind On the daily markets analysis on Open For Business, Hairianto Diman and Susan Ng speak with Khoon Goh, Head of Asia Research, ANZ
Straits Times
06-05-2025
- Business
- Straits Times
China's firm hand restores calm after Asia's wild currency moves
China's economic clout means the yuan is seen as an anchor for currencies across the region, with its stability reducing the chances of extreme moves elsewhere in Asia. PHOTO: REUTERS BEIJING – China signalled that it's not ready to let the yuan strengthen dramatically against the US dollar, helping restore calm to Asia's foreign-exchange market after days of extreme volatility. The People's Bank of China kept its daily reference rate for the yuan steady as it returned from a public holiday, pushing back against a recent rally in the offshore version of its currency – and making clear to traders that the dollar's rout in Asia won't all be one-way traffic. The country said it would hold a briefing on policy measures to stabilise the market on May 7. The moves come as the latest surge in Asian currencies has raised the need for central banks in the region to cap currency strength and calm currency markets. Taiwan on May 6 said it had intervened to weaken the country's dollar in April, while Hong Kong's central bank said it had conducted another round of Hong Kong dollar selling to limit the currency's moves within its trading band. Beijing's determination to keep the yuan relatively stable is a crucial factor for traders trying to weigh up how long an Asian currency rally against the greenback can continue. China's economic clout means the yuan is seen as an anchor for currencies across the region, with its stability reducing the chances of extreme moves elsewhere in Asia. 'They have no desire to allow the yuan to strengthen in anticipation of a trade deal which may not eventuate, or at the very least is still some way off,' Khoon Goh, head of Asia research at Australia & New Zealand Banking Group wrote in a note. Beijing seeking to keep the yuan fixing stable 'should stem the recent appreciation seen in other Asian currencies,' wrote Mr Goh. The onshore yuan was around 0.7 per cent higher on May 6, partly catching up to moves during the public holiday, but the offshore version of the currency weakened slightly. The Taiwan dollar slipped versus the greenback, snapping a six-day winning streak, while the dollar climbed against some other Asian currencies. By midday in London, the Bloomberg Dollar Spot Index was slightly higher on the day. State-owned banks bought the dollar in the onshore spot market on May 6 in an attempt to slow the yuan's advance, said local traders, who asked not to be identified. The Taiwan dollar led the wild moves in Asia this week, strengthening by as much 5 per cent against the greenback on May 5, its biggest gain since the 1980s. The recent action has been driven in part by bets on trade deals with the Umied States, with speculation that Taipei may agree to let its currency strengthen in order to secure a deal. The US Treasury said in November that it was monitoring the currency practices of China, Japan, Korea, Singapore, Taiwan and Vietnam, raising the possibility that appreciation against the greenback could be a bargaining chip in future trade deals. The PBOC set the daily fixing rate for the onshore yuan at 7.2008 on May 6, little changed from its level before the public holiday. The PBOC's decision to stand firm with its fixing came as Taiwan's central bank warned against 'irresponsible speculation,' while Hong Kong's de facto central bank has conducted four currency-selling operations since May 2 to limit gains in the local dollar. Still, ING Groep strategist Francesco Pesole sees a risk that Asian currencies may keep gaining versus the US dollar on increased hedging flows. 'Local players are now seeking greater USD hedging as well as starting to diversify away from US investments,' Mr Pesole wrote in a note. 'This fits into a more worrying bearish narrative for the dollar, and opens up a risk that a period of supposedly USD-positive trade deals with Asian countries may turn into an opportunity for USD-rich Asian countries to reduce USD exposure.' BLOOMBERG Join ST's Telegram channel and get the latest breaking news delivered to you.
Yahoo
06-05-2025
- Business
- Yahoo
Taiwanese life insurers' portfolios have billions of unhedged dollars
SINGAPORE (Reuters) -Taiwan's currency is at three-year highs after notching unprecedented gains as insurance firms, pension funds and other investors quit U.S. dollar assets or scramble to hedge exposure. Analysts estimate billions of dollars' worth of hedging or repatriation by life insurance firms could drive the Taiwan dollar even higher. WHY IT'S IMPORTANT The latest scramble by Taiwanese life insurers to protect their portfolios reflects an unwinding of massive U.S. dollar holdings by global investors, as U.S. President Donald Trump's chaotic trade policies shake decades of unquestionable faith that investors had in the dollar's dominance. That means investors based in low-yielding markets such as Taiwan, who for years could count on stable and high dollar yields as well as extra return owing to depreciation in their currencies, are now re-assessing portfolios. BY THE NUMBERS Khoon Goh, head of Asia research at ANZ, estimates Taiwanese life insurance companies hold $682 billion of foreign assets, mostly in U.S. fixed income, though he is unsure how much of that they could be selling or bringing home. UBS analysts say Taiwan's net international investment position, which measures the difference between its external financial assets and liabilities, is "uniquely large" at 165% of gross domestic product as compared to an average of 0% for other emerging Asian economies. Namik Immelback, chief strategist at SEB Research, estimates that of the $700 billion in foreign assets these life insurance companies hold, only 70%, or $490 billion, is hedged. Analysts at HSBC said as of last December, the average currency hedge ratio based on their sample of Taiwanese life insurance companies was slightly less than 60%. The three-month U.S. dollar/Taiwan dollar non-deliverable forward – a common metric used for hedging – fell to its most negative in 17 years on Tuesday, suggesting investors are heavily betting on further appreciation for the Taiwan dollar. (Reporting by Rae Wee; Editing by Ewan Harwood)
Reuters
06-05-2025
- Business
- Reuters
Taiwanese life insurers' portfolios have billions of unhedged dollars
SINGAPORE, May 6 (Reuters) - Taiwan's currency is at three-year highs after notching unprecedented gains as insurance firms, pension funds and other investors quit U.S. dollar assets or scramble to hedge exposure. Analysts estimate billions of dollars' worth of hedging or repatriation by life insurance firms could drive the Taiwan dollar even higher. WHY IT'S IMPORTANT The latest scramble by Taiwanese life insurers to protect their portfolios reflects an unwinding of massive U.S. dollar holdings by global investors, as U.S. President Donald Trump's chaotic trade policies shake decades of unquestionable faith that investors had in the dollar's dominance. That means investors based in low-yielding markets such as Taiwan, who for years could count on stable and high dollar yields as well as extra return owing to depreciation in their currencies, are now re-assessing portfolios. BY THE NUMBERS Khoon Goh, head of Asia research at ANZ, estimates Taiwanese life insurance companies hold $682 billion of foreign assets, mostly in U.S. fixed income, though he is unsure how much of that they could be selling or bringing home. UBS analysts say Taiwan's net international investment position, which measures the difference between its external financial assets and liabilities, is "uniquely large" at 165% of gross domestic product as compared to an average of 0% for other emerging Asian economies. Namik Immelback, chief strategist at SEB Research, estimates that of the $700 billion in foreign assets these life insurance companies hold, only 70%, or $490 billion, is hedged. Analysts at HSBC said as of last December, the average currency hedge ratio based on their sample of Taiwanese life insurance companies was slightly less than 60%. The three-month U.S. dollar/Taiwan dollar non-deliverable forward – a common metric used for hedging – fell to its most negative in 17 years on Tuesday , suggesting investors are heavily betting on further appreciation for the Taiwan dollar.
South China Morning Post
29-04-2025
- Business
- South China Morning Post
Malaysia delays sales tax expansion amid Trump's tariff pressure, offering businesses respite
Malaysia is delaying a planned expansion of its sales and service tax (SST), providing a reprieve for manufacturers bracing for higher US tariffs. Advertisement The planned widening of the tax base, originally due on May 1, will be implemented at a later date, a spokesperson from the Ministry of Finance said in a text message. Manufacturers have been urging the government to refrain from adding to their tax burdens this year after the US threatened a 24 per cent tariff on the Southeast Asian country. The sector, a major contributor to the nation's tax revenue, is under severe cost pressure, Soh Thian Lai, president of the Federation of Malaysian Manufacturers, said earlier this month. The delay in the move 'will provide some relief for businesses already grappling with the uncertainty caused by US tariff policy,' said Khoon Goh, head of Asia research at Australia & New Zealand Banking Group. 'While this means that the additional tax revenue from the SST expansion will be put off, the bigger concern at present is the growth impact rather than the government's finances.' Malaysia's ringgit rose 0.7 per cent against the dollar to its strongest level since October as of 11.15am in Kuala Lumpur, the best performer among Asian currencies after the Thai baht. Advertisement Other Southeast Asian countries are also seeking to mitigate the impact of the trade war on their economies.
