Asian Currencies to Outperform the Dollar, Standard Chartered's Mann Says
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Asian currencies are the best bets against the dollar as currency markets anticipate quantitative easing from the Federal Reserve, said David Mann, head of research, Americas at Standard Chartered Plc.
“I think there are better bets out there rather than purely going with long the euro against the dollar, such as the Korean won, Indonesian rupiah and the Indian rupee,” New York- based Mann said in a Bloomberg Television interview today with Julie Hyman and Mark Crumpton.
“We think these currencies are likely going to appreciate and we’ve been seeing walls of money coming in increasingly, amounts of allocations coming from investors from this part of the world in the U.S. and also from Europe,” he said.
Mann said he expects China’s currency to slowly appreciate. A gain of 20 to 30 percent would change the market’s mentality toward it.
“It’s going to go gradually and we’re going to see other currencies that are sort-of proxy currencies for the renminbi, the Korean won, the Malaysian ringgit, continue to appreciate alongside it,” he said.
China’s central bank pledged in a statement it will expand flexibility in the yuan, which has gained 2.1 percent since a two-year dollar peg was scrapped on June 19.
“We do believe it is in China’s interest to allow that currency to appreciate,” Mann said. “We’re going to see more and more of offshore renminbi and increasingly we’re going to see used as a reserve currency.”
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