Asian Currencies: A New Target for Investors Amid Dollar Weakness.

Asian Currencies Are Becoming More Attractive to Investors

After Latin American currencies held leading positions in carry trade strategies, Asian currencies have begun to attract the attention of investors as traders seek to take advantage of the weakening premium status of the US dollar.

In particular, the South Korean won, Indonesian rupiah, and Indian rupee are considered some of the most undervalued in emerging markets when compared to their historical averages. Alongside attractive valuations, new economic stimulus in China and progress in trade negotiations between the US and Asia add to the appeal of this region.

'Fundamentally, these currencies have been cheap for a long time,' noted Claudia Kalich, head of the emerging market debt instruments department at M&G Investment Management.

According to Goldman Sachs Group Inc. and Barclays Plc, the South Korean won, Indonesian rupiah, Malaysian ringgit, and South African rand have potential for further growth. Analysts also expect significant development of the Singapore and Taiwan dollars.

At the same time, the stability of the yuan may have both positive and negative implications for the region. A potential decrease in volatility could be a favorable factor, but excessive growth restrictions could be negative.