Unveiling the Dynamics of Asian and Global Forex Economic Landscape: Monday Asia!!

The dollar has been on a downward slide for four straight days, marking its longest losing streak since August! Excitingly, most major emerging market currencies have been on the rise against the dollar this year, with the Indian rupee being the only exception.

The dollar has hit a two-month low due to delays in the Trump administration's implementation of tariff proposals. Although President Donald Trump's ultimate tariff objectives remain firm, the process is taking longer than many analysts expected, offering some relief to markets and exerting pressure on the dollar.

Emerging and Asian assets are experiencing significant momentum. The MSCI Asia ex-Japan index has risen by 8% over the past month, marking a notable increase. However, this gain is surpassed by Hong Kong stocks, with the Hang Seng index climbing 20% and the Hang Seng tech index soaring 30% during the same timeframe.

Asian markets enter the new week with positive momentum, buoyed by a weaker dollar, a continuing recovery in China, and a broader shift towards global assets as investors move away from the 'U.S. exceptionalism' trades that were highly successful last year.

Japan's economy exceeded expectations in the fourth quarter, as indicated by the gross domestic product data released on Monday. A recovery in exports contributed to offsetting weak private consumption. GDP increased by 0.7% quarter-on-quarter, according to government data. This figure surpassed the anticipated 0.3% and improved from the previous quarter's 0.4%, which had been revised upward from 0.3%. GDP grew by 2.8% year-on-year, marking a significant acceleration from the 1.7% recorded in the prior quarter, which was also revised upward.

Meanwhile, rapid geopolitical developments concerning the Russia-Ukraine conflict are once again capturing investors' attention. French President Emmanuel Macron is set to host an emergency European summit on Monday after U.S. officials indicated that Europe would not be involved in any discussions to resolve the conflict, with the peace process appearing to be conducted between the U.S. and Russia.

Regardless of the political dynamics, the possibility of even an imperfect peace is exerting downward pressure on oil and the dollar, while boosting European stocks. Other risk markets, such as Asian and emerging assets, are also likely to benefit.