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Key Points

Jefferies warns of the US dollar's weakening trend, advising investors to shift to Asian currencies for long-term gains. The report highlights concerns over Trump administration policies and a historic drop in US net investment income. Analysts suggest hedging with Hong Kong dollar call options as a strategic move. This shift reflects growing skepticism about the dollar's stability in the current economic climate.

Key Points: Jefferies Advises Buying Asian Currencies as Dollar Weakens

  • US dollar index hits 2025 low of 97.8
  • Jefferies suggests long-dated call options on Hong Kong dollar
  • US net investment income turns negative for first time since 1960
  • Asian currencies seen as safer long-term bet
2 min read

Amid weakening dollar, buy Asian currencies for long-term standpoint: Jefferies

Jefferies recommends long-term investment in Asian currencies amid US dollar decline and economic uncertainty under Trump policies.

"Clearly, anything is possible in the Trump administration – Jefferies report"

New Delhi, June 27

Citing recent signs of weakness in the US dollar and other concerning trends in the American economy, global investment firm Jefferies advises investors to prefer Asian currencies over the US dollar.

In its latest report, Jefferies said that the US dollar index hit a new 2025 low of 97.8. This marks a continuing bearish trend for the currency from a long-term perspective. As a result, Jefferies recommends investors own Asian currencies for long-term gains.

It said "continues to advise investors to own Asian currencies from a long-term standpoint. It is also why GREED & fear has been recommending investors in recent weeks to buy long-dated five-year call options on a revaluation of the Hong Kong dollar against the US dollar".

This advice is based on growing concerns around the future direction of US economic and policy decisions under the current Trump administration.

The report noted that although the US may not fully proceed with extreme policy measures that could amount to an implicit default, the fact that such proposals are even being considered is negative for the US dollar.

"Clearly, anything is possible in the Trump administration," the report added, stating that any such moves are bearish for the US currency.

Another key concern raised in the report is the reversal of America's long-standing positive net investment income. Revised data published this week showed that the US net investment income, the income received from foreign investments minus payments made to foreign investors, has turned negative for the first time since data collection began in 1960.

Despite having a negative net international investment position (IIP) for 36 years, the US has managed to post positive net investment income flows.

However, according to the latest data, the report stated that this has now changed. Net investment income fell from an annualised 1.43 per cent of GDP in the four quarters to 2018 to a record negative 0.07 per cent of GDP in the four quarters to the third quarter of 2024.

It stood at a negative 0.05 per cent of GDP in the four quarters to the first quarter of 2025.

Jefferies sees this reversal as a significant development, adding further pressure on the US dollar and reinforcing the case for investing in Asian currencies.

- ANI

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Reader Comments

R
Rahul K.
This makes sense for long-term investors. With India's strong growth trajectory, the rupee should appreciate against weakening dollar. But our RBI needs to be careful about too much volatility - sudden capital flows can destabilize our markets. 🇮🇳
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Priya M.
Interesting analysis! But I worry - if dollar weakens too much, won't it make our IT exports less competitive? Many Indian companies earn in dollars but pay salaries in rupees. Need balanced approach for Make in India and services both.
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Amit S.
Dollar weakness is temporary. America has bounced back before. Instead of betting on currencies, better to invest in solid Indian companies with good fundamentals. Our domestic market is strong enough to give good returns.
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Neha P.
Good time for NRIs to send money home! Weak dollar means more rupees for every dollar remitted. This could boost our forex reserves further. Hope RBI uses this opportunity wisely to strengthen our economic position.
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Sanjay T.
While Asian currencies may benefit, we must remember China's yuan is also facing challenges. India should focus on making rupee more stable and internationally acceptable rather than depending on dollar's weakness. Atmanirbhar Bharat should include currency strength too!
K
Kavita R.
The report mentions Hong Kong dollar but what about INR? Our currency has held relatively stable despite global turmoil. This shows underlying strength of Indian economy. Maybe time to diversify into rupee-denominated assets rather than just betting on Asian currencies generally.

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