Jefferies Recommends Buying Asian Currencies As Dollar Weakens

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

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

Source : Freepik

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. 

(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)