EM Asia FX Rates Views Asian tech related currencies outperform

Economics Research 25 July 2026 | 3:10PM SGT

Asian tech-related currencies outperform

1. Clear divergence observed within the Asian FX complex, with tech-related Danny Suwanapruti | currencies outperforming. The two main drivers of Asian macro markets this year Goldman Sachs (Singapore) Pte have been the energy supply shock and the AI-related investment boom. Chris Poh Directionally, USD/Asia has broadly risen since February, as DXY has gained around | Goldman Sachs (Singapore) Pte 5% since January. However, within Asian FX, there are notable themes. First, despite broad USD strengthening, USD/CNY continued its grind lower to around 6.77 Lisheng Wang | currently from 7.0 at the turn of the year. Second, tech-related currencies (KRW, Goldman Sachs (Asia) L.L.C. TWD, SGD, and MYR) have broadly outperformed non-tech and high energy Xinquan Chen import-dependent currencies (such as THB, PHP, IDR, and INR) (Exhibit 1). Asian | rates markets have sold off this year, as regional central banks have turned more Goldman Sachs (Asia) L.L.C.

hawkish, with the BSP hiking to temper inflation expectations, BI hiking to defend Irene Choi | against currency weakness, and the BoK hiking on much stronger- than-expected Goldman Sachs (Asia) L.L.C., Seoul Branch

growth. The RBI has refrained from hiking thus far and has opted to address currency Santanu Sengupta | weakness with FX tools. The re-escalation of the conflict in the Middle East and Goldman Sachs India SPL potential disruption in the Red Sea have driven Brent oil prices back up to USD 100/bbl. Meanwhile, news emerged on July 24, that the US plans to impose Arjun Varma | 10-12.5% tariffs on 60 trading partners, which comes at a time when a temporary Goldman Sachs India SPL 10% global tariff expires. Our G10 FX strategists recently revised up their USD Andrew Tilton forecasts vs. EUR and JPY over the next 3-, 6- and 12-month horizons. Given the | macro mix of higher oil prices, a more hawkish Fed, a still-intact AI-related Goldman Sachs (Asia) L.L.C.

investment theme (despite having just experienced a correction), and a USD/CNY anchor, we think the theme of Asian tech-related currency outperformance should persist in the coming months.

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Goldman Sachs EM Asia FX/Rates Views

Exhibit 1: CNY and Asian tech-related currencies have outperformed this year

Index (Jan 1. 2026 = 100) Index (Jan 1. 2026 = Asia-Pacific Exchange Rates vs. USD Stronger 104 104 CNY

90 90 Jan Feb Mar Apr May Jun Jul Aug

Source: Bloomberg, Goldman Sachs Global Investment Research

2. China – Widening divergence between exports and domestic consumption; CNY appreciation trend to persist. China’s growth momentum slowed notably from 5.3% in Q1 to 3.6% qoq annualized in Q2. While export-related activity remained robust, domestic consumption indicators showed a meaningful slowdown, further widening the divergence (Exhibit 2). Nominal exports have been growing in the range of 15–30% yoy, while retail sales growth slowed from 3.7% in 2025 to 1.3% yoy in the first half of 2026. Fixed asset investment (FAI) weakened further from -3.8% yoy in 2025 to -5.7% yoy in H1-2026, while property indicators remained sluggish. We attribute the decline in growth momentum to three factors: i) the fiscal impulse turned negative in Q2 following the strong Q1 GDP print; ii) the energy supply shock led to lower production of chemicals and refined petroleum products; and iii) adverse weather conditions. To summarize, China’s economy is being propelled by strong performance in high-tech manufacturing and related sectors, while activity across the broader economy remains subdued. Our economists expect growth momentum to pick up in H2-2026, supported by fiscal easing, and forecast full-year GDP growth of 4.6% yoy. The energy supply shock should have less of an adverse impact on the economy, as oil prices have retreated from their Q2 highs. The CNY has outperformed and is the only Asian currency to have appreciated against the USD this year (Exhibit 3). We expect the…