Goldman Sachs Asia FX Recommendations

"We take profit on our long-held SGD/TWD trade for a potential total return gain of around 18% since inception. We also take profit on our short CNH/KRW trade recommendation for a potential gain of around 5.50%. Both trades have performed well and given the recent developments in macro markets, we reposition our favored expressions for NJA FX. We now recommend going short SGD/MYR and short TWD/KRW."

• "We recommend going short SGD/MYR. We adjusted our USD/Asia FX forecasts lower in last week's Global FX Trader, to take into account key macro developments such as China re-opening, the BoJ's tweak to YCC and an improved growth outlook in Europe following the warmer than expected winter. We had highlighted that our most bullish NJA currencies were the KRW, MYR, THB and CNY. "
• "The China reopening boost should also be beneficial to Malaysia's economic growth via goods and services. Meanwhile, we think the bulk of SGD outperformance is behind us and the MAS are done tightening policy."
• "We recommend going short TWD/KRW. We have been bullish the KRW since late last year and initiated a recommendation to go short CNH/KRW on November 7th, 2022. Since the inception of this trade, the KRW has been the best performing currency in NJA, rallying by around 11% against the US dollar. The premise for our bullish KRW outlook has not changed, and we take profit on the trade as it is less clear that CNH will continue to underperform the KRW, given that China is re-opening faster than expected. Meanwhile, we continue to like using the TWD as a funding currency, and we think the TWD will likely underperform Northeast Asian currencies. The FX forward and NDF points are negative and therefore being short TWD offers a positive carry. "