Goldman Sachs Bearish On Broader USD/Asia On USD View

Goldman Sachs note that "despite the rise in US 10-year yields, we remain bearish on the USD this year, and by extension bearish on USD/Asia. We think KRW, CNY and MYR should outperform low-yield markets, while THB should underperform. KRW should benefit from robust exports (largely tech driven), whilst the currency is highly geared to global growth. We forecast USD/KRW at 1020 in 12 months. CNY should outperform on strong growth, wide rate differentials and valuations. We maintain our USD/CNY 12M forecast at 6.20. Meanwhile, the MYR should outperform given both its electronic exports, and also given that it is the largest net commodity exporter in the region. THB should underperform, however, as the tourism outlook remains lackluster for 2021. Amongst the high yielder markets, we think INR and IDR will outperform the PHP. We are also broadly constructive on IDR, given both our pro-risk outlook, and that it remains one of EM's more attractive high-yield EM markets. Compared to INR and IDR, we expect PHP to underperform in 2021, as the current account should gradually slip back towards a deficit from a strong surplus in 2020."