Asia FX: AI-driven support for regional currencies – MUFG

MUFG’s Michael Wan notes that improved risk sentiment and AI optimism around Meta’s Muse supported a slightly stronger Dollar and stable DM yields. He argues that Asia FX and rates could benefit from continued infrastructure build-out tied to AI, with value shifting toward applications and inference. MUFG remains positive on Asia’s AI story, expecting robust growth despite modest export slowing in 2027.

AI infrastructure backs Asia FX outlook

"For Asia FX and rates, this could mean continued strength in the infrastructure build-out, but with less focus on model training and continued shift towards the inference layer and also less focus on the most advanced chips as tech companies build for consumers."

"We continue to be positive on the AI story for Asia and our base case is for some modest slowing in exports in 2027 and importantly for overall growth to remain robust."

"We as such continue to like KRW, TWD, and to some extent the tech linked currencies in Asia such as MYR and SGD."

"CNY should also continue to do well with contained volatility ahead of the Trump-Xi summit."

"Risk sentiment improved, the Dollar was slightly stronger, while DM yields were stable, as optimism around Meta’s new personal assistant Muse boosted sentiment around the next phase of AI together with general positive tones out of US-China talks."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)