Steven Chiu

Chinese yuan, Singapore dollar and Hong Kong dollar are the best places to be for dollar‑neutral positioning. China structurally supports a stronger yuan, the MAS maintains an appreciation bias for the SGD, and the HKD peg adds stability. These currencies can perform well regardless of the overall dollar trend.

The speaker explicitly stated the Singapore dollar and Hong Kong dollar "will always play a safe haven role" and that these two, along with the Chinese yuan, are "the best picks" in Asia, while advising to "stay away from" other Asian currencies. The Iran war is causing risk aversion and high energy prices, which disproportionately hurt Asian economies that are major oil importers. Currencies with safe-haven attributes, tightening biases, or managed stability are expected to outperform. Therefore, a long position on SGD, HKD, and CNY is favored relative to other Asian currencies in the current environment. A swift resolution to the Iran war and a sharp decline in energy prices would reduce risk aversion and the safe-haven premium, diminishing the relative advantage of these currencies.

The PBOC cut the risk reserve requirement on FX forward sales to zero. This regulatory change lowers the transaction cost for banks and corporates to buy dollars and sell the Yuan. It is a direct policy signal that the central bank wants to halt the rapid appreciation of the Renminbi. SHORT CNY (Long USD/CNY) as the central bank actively leans against further strength. A sudden weakening of the US Dollar globally could override PBOC policy efforts.