Asian Currencies Surge In "Crisis-In-Reverse" Dollar Retreat

A dramatic surge in Asian currencies is shaking global markets as investors pull back from U.S. assets, Rae Wee and Samuel Shen reported for Reuters.

Alarms have been raised about the weakening global support for the U.S. dollar.

The Taiwan dollar’s 10% rally over two days has triggered similar moves in Singapore, South Korea, Malaysia, China, and Hong Kong, raising alarms about weakening global support for the U.S. dollar.

While markets calmed somewhat on Tuesday, Hong Kong’s dollar approached the strong edge of its peg, and Singapore’s currency reached a decade-high.

“This feels like an Asian crisis in reverse,” said Louis-Vincent Gave of Gavekal Research.

In contrast to the 1997–1998 crisis—when capital fled Asia and nations amassed dollar reserves—today’s capital flow is reversing, as Asia’s export-heavy economies appear less inclined to reinvest surpluses in U.S. Treasuries.

“That one-way trade no longer looks like a slam dunk,” Gave warned.