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Since the start of 2025, a reversal of Trump trade has happened, after its three and half months’ running, reflecting a change of market’s focus this year thus far. As we enter the Q2, we think that Trump trade, more specifically, tariffs trade will likely return, as more tariffs are to be announced and implemented, and market participates would realize more that tariffs is both a negotiation tool and real deal to Trump.
Asian FXs levels are not reflective of potential tariffs and their negative impact on Asian economies yet. We expect an overall depreciation of Asian currencies against the Dollar in Q2. However, with different degrees of exposures to tariffs, and country specific factors, some currency would weaken more than others.
