Reassessing our forecasts for Asian currencies

The de-escalation of the US-China trade war and the Trump administration’s wider reduction of tariff rates means that a sharp depreciation of the renminbi has become less probable. While we continue to think the greenback will rebound a bit against most currencies in the coming months as the FOMC keeps policy on hold for longer than generally expected, we now think that the dollar will weaken against the renminbi and most other Asian currencies over our three-year forecast horizon as a whole.