Asian currencies rallied sharply, led by a historic surge in the Taiwan dollar, as growing speculation over imminent trade talks between the US and its Asian partners boosted market sentiment and fueled hopes of policy shifts, Danske Bank's FX analysts report.
Yuan and Won strengthen as markets eye US-Asia talks
"Asian currencies saw some big moves yesterday with the Taiwan dollar surging 5%, the largest gain since 1988, as the market speculated Taiwanese authorities would allow it to appreciate as part of a trade deal with the US. USD/CNH also dropped sharply from 7.27 to below 7.20 to the lowest level since early November last year."
"The Korean won also saw a big gain against the USD. It seems the moves are driven by expectations of trade deals coming soon. There is rising speculation that US and China will soon start to talk as pain is growing on both sides and indications in both the US and China suggest they are open for talks. We still wait for the clear signal that talks will begin, though."
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