Goldman Sachs(US:GS) Hua Er Jie Jian Wen·2025-04-30 11:26Group 1 - Goldman Sachs indicates that as central banks seek to diversify their reserve assets and reduce reliance on the US dollar, the Korean won, Singapore dollar, and Chinese yuan are likely to be the biggest beneficiaries in Asia [1] - The report highlights that despite the US dollar and euro remaining primary reserve assets, central banks are expected to increase their allocation to Asian currencies [1] - The Korean won is expected to gain traction as South Korea is likely to be included in the FTSE World Government Bond Index (WGBI) next year, leading to increased global central bank holdings of Korean bonds and thus more demand for the won [1] - The Singapore dollar is favored due to Singapore's AAA rating, stable financial markets, and transparent trading environment, making it attractive for central bank investments [1] - The Chinese yuan benefits from China's position as one of the largest trading nations, providing it with a natural liquidity advantage and making it a "logical candidate" for increased use [1] Group 2 - The trend of "de-dollarization" began in 2022 following the US freezing of Russian dollar reserves amid the Russia-Ukraine conflict, raising concerns among global central banks about the safety of holding US dollars [2] - Uncertainties surrounding potential Trump re-election and fluctuating US fiscal and trade policies have eroded foreign confidence in US assets, contributing to a shift in market sentiment [2] - The Bloomberg Dollar Index has declined over 7% since its peak in February, while gold purchases have reached record highs, indicating a movement towards diversifying reserve currencies [2] - Goldman Sachs estimates that the US dollar is overvalued by approximately 17%, predicting a rotation of global assets towards alternatives, including Asian assets [2]