Eddie Wang, Head of FX Structuring for Asia, said, “In the post-crisis world, some key trends have emerged in the FX market. First, risk appetite has improved significantly as measured by volatility. Importers and exporters re-started hedging programs as they gain more visibility of their business. Asset managers increased their currency hedge as international equity markets rise. Investors look to FX for asset diversification and in search of yield. Second, carry trades have returned and USD replaced JPY as the favorite funding currency. The main beneficiaries of this trend are the high yield commodity currencies such as AUD, but the risk remains a quick unwind as seen during the crisis. Third, the crisis accelerated Asia’s emergence, and the share of Asian currencies in global FX market has increased. CNY will become a world currency in the long term, although in the short term offshore market will still be the main access point for overseas companies who need to hedge CNY.”

 

The 3^rd part of Fixed Income Markets (FIM) Investment Series 2009 will be held in Hong Kong on November 10, 2009.