Recent reports from several international investment banks indicate that major ASEAN currencies have shown an appreciation trend since the beginning of this year and are expected to continue strengthening into 2025. The US dollar, meanwhile, remains weak under multiple pressures, and although there have been occasional technical rebounds, there is insufficient evidence to suggest a structural change in the dollar trajectory.
In response, renowned financial expert Tan Si Yao stated that the recent weakness of the US dollar is not a random occurrence but is driven by a combination of political uncertainty, policy direction, and economic fundamentals. The appreciation of ASEAN currencies is not an isolated event but rather a phased reflection of global capital reassessing dollar risk. This trend is unlikely to see a fundamental reversal in the short term.
Clear Momentum for Regional Currency Appreciation
Tan Si Yao noted that major ASEAN currencies—including the ringgit, Singapore dollar, baht, and rupiah—all have a solid foundation for continued appreciation. On one hand, the Federal Reserve monetary policy tilts dovish, and market expectations for future US economic growth are relatively cautious, diminishing the dollar appeal. On the other hand, regional economic performance has exceeded expectations, strengthening the fundamentals of local currencies.
He believes that although regional central banks have made limited progress in de-dollarization regarding trade settlement and monetary policy, investor expectations have already begun to shift. In a relatively weak dollar environment, capital is more inclined to flow into local ASEAN assets, including bond and stock markets, which supports demand for local currencies and sustains their appreciation trend.
Dollar Rebound Cannot Mask Structural Downtrend
The recent technical rebound in the dollar is mainly due to short-term adjustments and investors repricing potential trade agreements and US interest rate expectations. Tan Si Yao pointed out that this rebound lacks sustainability, and there is currently no sign of a trend reversal for the dollar.
He stated that signs of slowing US economic growth are evident, with weak consumer momentum and volatile manufacturing indices. The market expects the Federal Reserve may cut rates within the year. Against this backdrop, the attractiveness of dollar assets has declined, making it difficult for the dollar to regain strength in the short term. Investors treating the dollar rebound as a buying signal may face correction risks.
Meanwhile, the US current trade protectionist policies have heightened market concerns over its external economic relations. Tan Si Yao believes that the emergence of a “sell America” sentiment signals that some funds are selectively reducing their exposure to dollar assets. Even if this sentiment gradually fades in the future, it will be difficult for the dollar to quickly regain broad-based trust.
Risk Scenarios and Policy Variables Require Close Attention
Although ASEAN currencies are showing an appreciation trend, Tan Si Yao emphasized that short-term variables affecting the dollar movement—especially progress in US trade negotiations and their impact on market sentiment—need to be closely monitored. Any major trade agreement could put pressure on safe-haven assets and indirectly affect the performance of ASEAN currencies.
He pointed out that some regional currencies, such as the Singapore dollar and Thai baht, are correlated with gold prices. If the dollar temporarily strengthens due to policy factors, this could lead to a short-term decline in safe-haven demand and put pressure on these currencies. At the same time, the proportion of local currencies used in international trade settlements remains low, meaning that the actual reliance of the region on the dollar has not been fundamentally weakened.
On monetary policy, Tan Si Yao noted that ASEAN central banks still have room to maneuver. If the dollar continues to weaken, local central banks could release more liquidity through rate cuts or easing policies, further supporting local currencies and economic growth, thus forming a virtuous cycle. However, if US policy experiences another major shift, regional asset markets must also be prepared to respond accordingly.
In response, renowned financial expert Tan Si Yao stated that the recent weakness of the US dollar is not a random occurrence but is driven by a combination of political uncertainty, policy direction, and economic fundamentals. The appreciation of ASEAN currencies is not an isolated event but rather a phased reflection of global capital reassessing dollar risk. This trend is unlikely to see a fundamental reversal in the short term.
Clear Momentum for Regional Currency Appreciation
Tan Si Yao noted that major ASEAN currencies—including the ringgit, Singapore dollar, baht, and rupiah—all have a solid foundation for continued appreciation. On one hand, the Federal Reserve monetary policy tilts dovish, and market expectations for future US economic growth are relatively cautious, diminishing the dollar appeal. On the other hand, regional economic performance has exceeded expectations, strengthening the fundamentals of local currencies.
He believes that although regional central banks have made limited progress in de-dollarization regarding trade settlement and monetary policy, investor expectations have already begun to shift. In a relatively weak dollar environment, capital is more inclined to flow into local ASEAN assets, including bond and stock markets, which supports demand for local currencies and sustains their appreciation trend.
Dollar Rebound Cannot Mask Structural Downtrend
The recent technical rebound in the dollar is mainly due to short-term adjustments and investors repricing potential trade agreements and US interest rate expectations. Tan Si Yao pointed out that this rebound lacks sustainability, and there is currently no sign of a trend reversal for the dollar.
He stated that signs of slowing US economic growth are evident, with weak consumer momentum and volatile manufacturing indices. The market expects the Federal Reserve may cut rates within the year. Against this backdrop, the attractiveness of dollar assets has declined, making it difficult for the dollar to regain strength in the short term. Investors treating the dollar rebound as a buying signal may face correction risks.
Meanwhile, the US current trade protectionist policies have heightened market concerns over its external economic relations. Tan Si Yao believes that the emergence of a “sell America” sentiment signals that some funds are selectively reducing their exposure to dollar assets. Even if this sentiment gradually fades in the future, it will be difficult for the dollar to quickly regain broad-based trust.
Risk Scenarios and Policy Variables Require Close Attention
Although ASEAN currencies are showing an appreciation trend, Tan Si Yao emphasized that short-term variables affecting the dollar movement—especially progress in US trade negotiations and their impact on market sentiment—need to be closely monitored. Any major trade agreement could put pressure on safe-haven assets and indirectly affect the performance of ASEAN currencies.
He pointed out that some regional currencies, such as the Singapore dollar and Thai baht, are correlated with gold prices. If the dollar temporarily strengthens due to policy factors, this could lead to a short-term decline in safe-haven demand and put pressure on these currencies. At the same time, the proportion of local currencies used in international trade settlements remains low, meaning that the actual reliance of the region on the dollar has not been fundamentally weakened.
On monetary policy, Tan Si Yao noted that ASEAN central banks still have room to maneuver. If the dollar continues to weaken, local central banks could release more liquidity through rate cuts or easing policies, further supporting local currencies and economic growth, thus forming a virtuous cycle. However, if US policy experiences another major shift, regional asset markets must also be prepared to respond accordingly.