Goldman Look For Low-Yielding SE Asia To Outperform High-Yielders

Goldman Sachs note that “the Singapore Dollar remains our favored NJA currency given the MAS’s hawkish stance and Singapore’s above trend growth. Separately, with tourism picking up pace and re-opening of travel likely to be in full swing on a 6- and 12-month horizon, we remain bullish on the THB. The Malaysian Ringgit has not performed as well as expected, despite Malaysia being a net commodity exporter, but a build-up USD deposits should provide a positive tailwind for the MYR ahead. Meanwhile, when framed versus the Dollar, we are bearish on NJA high-yielders, including INR, PHP and IDR. We have recently revised our BOP estimates lower for India and have already adjusted our USD/INR forecasts to INR80, INR81 and INR81 (3-, 6- & 12-month horizons). We have been bearish on the PHP all year; it has traded significantly weaker and we are refreshing our USD/PHP forecasts higher to PHP56, PHP55.5 and PHP54.5 (from PHP53.5, PHP53 and PHP53), on 3-, 6- & 12-month horizons, as the new administration’s pro-growth policy is bearish for the currency (in anticipation of heavy imports). Bank Indonesia remains one of the most dovish in the region (having not hiked yet), as inflation has remained within the target band and its terms of trade have improved. However, with rate differentials narrowing, we adjust our USD/IDR forecasts higher to IDR15200, IDR15000 and IDR14700 (from IDR14600, IDR14400 and IDR14200 previously), on 3-, 6- & 12-month horizons."