A sharp rally in Asian currencies is expected to increase demand for wealth management and foreign exchange (forex) products, as clients seek alternatives to U.S. dollar-denominated assets and look for ways to hedge against trade tariff risks, according to bankers and analysts.
The rally, which began with Taiwan’s currency and spread to China, Hong Kong, Malaysia, Singapore, and South Korea, has raised concerns about the U.S. dollar’s position and is being described as an “Asian crisis in reverse.”
Tan Su Shan, CEO of Singapore’s largest bank, DBS Group, said that the strong performance of Asian currencies enhances the purchasing power of their clients, most of whom are based in the region. “When their local currency strengthens, it gives them more ability to invest in wealth management products,” she explained.
Leong Yung Chee, CFO of United Overseas Bank (UOB), highlighted that a stronger Singapore dollar would attract more wealth into Singapore, reinforcing its status as a global wealth management hub. Singapore’s currency has appreciated by over 4% since U.S. President Donald Trump raised tariffs on April 2.
Leong added, “We hope to benefit from the wealth management opportunities arising from this, especially in our retail business.”
The impact of President Trump’s trade policies is pushing investors away from U.S. assets and towards Asia, with growing doubts about the dollar’s role as a safe haven. Analysts predict that a weaker dollar will dampen demand for U.S. fixed-income assets among wealthy clients in Asia, who are now more inclined to consider investments in local currency-denominated assets.
As more assets flow back into Asia, the region’s appeal as a global wealth hub is expected to grow. Between 2025 and 2028, Asia is forecast to account for nearly half of all new high-net-worth individuals (HNWIs) worldwide, according to Knight Frank’s 2025 Wealth Report.
Morningstar senior analyst Michael Makdad noted that while the recent fluctuations in Asian currencies have not yet significantly impacted investor sentiment, long-term trends may influence investment flows out of U.S. assets. In Taiwan, the sharp 8% rise in the currency over two days caused a stir, especially among life insurers traditionally focused on U.S. dollar-denominated investments. If these insurers struggle to generate returns from U.S. fixed-income products, banks may offer alternative wealth management options.
Chinese exporters, who have accumulated substantial U.S. dollar-denominated assets due to expectations of a weaker yuan, could see significant shifts in their portfolios. Christopher Beddor, deputy director of China research at Gavekal Dragonomics, noted that changes in currency expectations and interest rates might lead to a large flow of funds into yuan-denominated accounts.
While such a shift is not imminent, it remains a concern for many investors, he added.
The rising volatility in currency markets is also expected to increase demand for forex services from regional banks. However, the stronger currencies pose challenges for local exporters, making their products less competitive. As DBS’s Tan pointed out, the impact of stronger currencies could be both positive and negative, depending on whether companies are net exporters or importers.
In Japan, firms may turn to more sophisticated hedging strategies to manage currency risks. Traditionally, Japanese companies have relied on basic hedging techniques, such as selling dollars and buying yen. However, the growing uncertainty around tariffs is pushing them to explore other financial instruments, according to Noriaki Masuda, deputy manager at Mitsubishi UFJ Bank.
Masuda warned that currency fluctuations could hurt company profitability, potentially leading to changes in business operations or price increases.
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