According to a recent report from Goldman Sachs, the performance of Asian currencies is becoming closely tied to the artificial intelligence sector, particularly those linked to semiconductor exports.
The South Korean won, Taiwan dollar, Singapore dollar, and Malaysian ringgit have shown stronger performance compared to currencies like the Thai baht and Philippine peso, which are more affected by rising energy costs.
The U.S. dollar has strengthened this year, driven by higher oil prices and a hawkish Federal Reserve, but Goldman anticipates that the divergence among Asian currencies will persist as long as AI investments continue to thrive. South Korea's current account surplus is projected to reach nearly $300 billion, or 13.9% of GDP, bolstered by AI-driven semiconductor exports.
Similarly, Taiwan's current account surplus is expected to hit 25% of GDP, with exports growing at a remarkable pace. The yuan has also appreciated against the dollar this year, supported by strong high-tech manufacturing, despite a generally subdued economy.
Goldman Sachs maintains a bullish outlook on the South Korean won, Taiwan dollar, Indian rupee, and Malaysian ringgit, while expressing bearish views on the Thai baht and Indonesian rupiah due to various economic challenges. The report underscores the significant impact of AI-related growth on currency performance in the region