Manulife strategist on dollar weakness, Fed, and Asia markets (with Paul Allen)

1/12/2026 2:02:48 PM	medium term cautious down	20 days later	-1.53%	+0.77%

1/12/2026 2:02:48 PM	medium term cautious down	20 days later	+2.49%	-1.25%
8/21/2025 9:02:06 PM	short term cautious down	5 days later	-0.52%	+0.26%

President Trump seems relaxed about dollar weakness; can we expect more dollar weakness going forward?

Paul Allen

Utting Shaw

Yes, the trend could have more to run as the US wants a weaker dollar to support exports and narrow the trade deficit.

Overnight we had massive moves in dollar turning weaker, and President Trump seems relatively okay with the trend.

Which currencies specifically benefit from this trade?

Paul Allen

Utting Shaw

Regional currencies including the renminbi and yen could see more upside.

Asia region performance has been under pressure, but now with dollar turning weaker, regional currencies could benefit.

Are we seeing a structural shift towards local currency bond markets in Asia?

Paul Allen

Utting Shaw

Local currency bonds benefit from relatively loose global liquidity and good risk sentiment.

The overall dollar trend this year alongside continued easing expectations bodes well.

Do you see the Kospi pushing even higher despite Trump's tariff threats?

Paul Allen

Utting Shaw

We still have an overweight view over the medium term for Kospi, but there could be near-term adjustments given recent moves.

Kospi benefits from Value Up corporate reform and AI theme driving inflows, alongside resilient export backdrop.

How do you approach investing in tech space in Asia - more upside for South Korean names or value in Chinese tech?

Paul Allen

Utting Shaw

Overall tech sector is still front and center, but we need to see broadening of investments and monetization to justify high valuations.

Upcoming earnings will be crucial to see if investors are satisfied with earnings improvement and forward guidance.

Where do you sit on AI profitability going forward?

Paul Allen

Utting Shaw

Profitability is slowly coming in; upcoming earnings will give more clues. Valuation is already quite high.

We need profitability to come in to justify sustainable trend of outperformance.

Are you concerned about circular dealmaking in AI space?

Paul Allen

Utting Shaw

Circular nature of investments does risk concentration, but broad support on AI theme with resilient macro backdrop bodes well for near term.

How contingent is your Taiwan optimism on geopolitical stability?

Paul Allen

Utting Shaw

Geopolitics will be high on investors' radar; calls for flexibility in allocations and diversification.

You see commodities rally as result of higher potential risk being priced in on geopolitics side.

What's your favorite go-to hedge against AI trade? India?

Paul Allen

Utting Shaw

India macro looks very good with resilient growth, but foreign outflows and trade uncertainty weigh on sentiment.

EU-India deal will help improve sentiment; India will gradually become more attractive as it benefits from AI-related themes.

What do you expect from Fed decision this week? Is two rate cuts optimistic?

Paul Allen

Utting Shaw

We still look around three cuts for this year - more dovish than market pricing.

Weakness in labor side of things starts to weigh more on Fed reaction function; more dovish policy stance likely with new Fed chair.

Are you expecting things to turn dark in the US given robust jobs, sticky inflation, good growth?

Paul Allen

Utting Shaw

Growth backdrop still resilient, inflation still sticky above 2%, but early signs of labor weakening could force more moves on Fed side.

Midterm election coming up means labor side will take more focus; dollar weakness helping boost liquidity brings some risk to baseline thinking.

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