We believe the US dollar bull run has come to an end on the back of peaking US rates. Rate differentials between the USD and other G10 currencies are unlikely to widen further, and this removes the main tailwind for USD. We hold a neutral view on the USD and are bullish on the Japanese yen, Singaporean dollar and Brazilian real. We expect neutral outlook for the euro, British pound and Chinese renminbi against a softer USD in 2023.
Asean is now a more economically integrated region through the Regional Comprehensive Economic Partnership, and Asean economies can also benefit from the reconfiguration and regionalization of Asia’s supply chains.The Brazilian central bank is expected to cut interest rates in the second quarter of 2023, after inflation has been brought under control, so Brazilian equities, local currency and hard currency bonds are expected to see some growth.
The investment required to get the world on track for net zero by 2050 must accelerate to over $4 trillion annually by 2030, not only in renewable power generation, but the entire clean energy value chain. It will be wise for investors to include quality companies that are aligned with sustainability goals in their long-term strategies. —Contributed INQ
The author is chief investment officer for Southeast Asia, Global Private Banking and Wealth at HSBC.Subscribe to our daily newsletter