Core Viewpoint - ING Bank NV predicts that the Indian Rupee will have the highest potential for appreciation among high-yield Asian currencies next year, driven by a potential US-India trade agreement [1] Currency Outlook - The report led by economist Dipali Bagavath indicates that the Rupee is expected to strengthen to 87 Rupees per US dollar by the end of 2026, representing an approximate 2% increase from current levels [1] - The Rupee is currently trading below its estimated fair value, making it one of the most undervalued currencies in Asia [1] Current Performance - The Indian Rupee is the second worst-performing currency in Asia this year, having depreciated by 3.5% against the US dollar [1] - A 50% tariff imposed by the US on India has pressured the Rupee, prompting intervention from the Reserve Bank of India to counter speculative bets against the currency [1] Trade Agreement Impact - Recent comments from US President Donald Trump suggest that the US and India are close to finalizing a trade agreement, which could improve the outlook for the Rupee [1] - As of the latest data, the Rupee is trading at 88.70 per US dollar, hovering near historical lows after two consecutive days of decline [1] Investment Sentiment - Economists believe that a positive outcome from trade negotiations could lead to a significant rebound in the Indian Rupee [1] - India remains a strong contender among high-yield currencies due to robust fundamentals, manageable fiscal risks, and ongoing diversification of supply chains attracting investment [1] Market Trends - With a decline in Indian stock market valuations and high bond yields in the region, investor sentiment towards Indian assets is gradually improving [1] - Major financial institutions, including Goldman Sachs, have shifted to increase their holdings in Indian stocks, anticipating a market rebound [1]

Core Viewpoint - The Dutch International Bank predicts that the Indian Rupee has the highest appreciation potential among Asian high-yield currencies in the coming year, particularly if a trade agreement is reached between India and the United States [1] Group 1: Currency Outlook - The report forecasts that by the end of 2026, the Indian Rupee will appreciate to 87 Rupees per US Dollar, representing an increase of approximately 2% from current levels [1] - The current trading price of the Rupee is considered to be below its fair valuation based on the real effective exchange rate, indicating significant appreciation potential [1] Group 2: Economic Fundamentals - Economists highlight that if trade negotiations progress favorably, the Indian Rupee could experience a substantial turnaround [1] - India is recognized as a leading high-yield economy with solid fundamentals, manageable fiscal risks, and a diversified supply chain that continues to attract investment [1]

Core Insights - The Ghanaian currency, the Cedi, has continued its upward trend in the interbank market, particularly against major currencies like the US Dollar [1] - As of October 16, 2023, the exchange rate of the Ghanaian Cedi to the US Dollar is approximately 10.62 Cedis, a significant appreciation from earlier in the month when it surpassed 12 Cedis [1] Currency Performance - The Cedi has shown strong performance against the US Dollar, indicating a recovery in the currency's value [1] - The appreciation of the Cedi reflects a positive shift in the currency's market dynamics, which could influence investor sentiment and economic stability in Ghana [1]

Group 1 - The World Bank projects Ghana's economic growth rate to reach 4.3% by the end of 2025, an increase from the previous forecast of 3.9% [1] - Economic growth in Ghana is expected to be driven primarily by the services sector, which is projected to grow by 9.9% [1] - The World Bank forecasts continued positive growth for Ghana, with expected growth rates of 4.6% in 2026 and 4.8% in 2027 [1] Group 2 - Ghana's inflation rate is projected to reach 15.4% by the end of 2025, while official data shows a significant decrease to 9.4% in September 2025 from 21.5% the previous year [1] - The Ghanaian cedi has appreciated over 20% in the first eight months of 2025 after a 19% depreciation in 2024, attributed to tight fiscal and monetary policies and increased export revenues from cocoa and gold [2] - Ghana faces refinancing pressures with a $500 million European bond redemption due in 2025, which will rise to 1.2% of GDP by 2026 [2] Group 3 - Frequent power outages are impacting productivity in Ghana, leading to operational disruptions and increased costs for businesses [2] - Stable electricity supply and competitive energy prices are crucial for maintaining industrial productivity and attracting new investments [2]

Core Insights - The Brazilian real has appreciated by 16.18% against the US dollar year-to-date as of September 17, making it the fifth strongest currency globally [1] - The depreciation of the US dollar is attributed to investor skepticism regarding President Trump's economic policies [1] - Among 33 global currencies, only four have depreciated, with the Russian ruble, Hungarian forint, and Swedish krona leading in appreciation [1] Currency Performance - The Brazilian real's nominal appreciation of 16.18% ranks fifth globally [1] - The top three appreciating currencies are: - Russian ruble (+36.6%) - Hungarian forint (+19.96%) - Swedish krona (+18.29%) [1] - The currencies with the largest depreciation include: - Argentine peso (-30.05%) - Turkish lira (-14.45%) - Indian rupee (-2.98%) [1]

Group 1 - The Norwegian central bank's upcoming monetary policy meeting on September 18 faces a complex decision-making environment due to a disconnect between recent economic data and policy signals [1] - Norway's inflation rate remains above the central bank's target of 2%, and wage growth expectations for 2025 have exceeded the previous forecast of 4.5%, indicating an accelerating economic expansion [1] - The current policy interest rate of 4.25% is not considered "overly tight" and aligns with the current economic conditions, suggesting that concerns about "overly tight" policy may lack basis [1] Group 2 - The Norwegian krone has appreciated by 3.65% against the euro since early August and has risen 5.5% since April, which typically has a dampening effect on inflation [1] - However, the effects of currency appreciation have not yet fully manifested in price data, indicating that exchange rate movements alone do not provide sufficient justification for a rate cut [1] - Market participants believe that the central bank's core policy dilemma lies in balancing persistent inflation pressures with the potential deflationary effects of the krone's appreciation, leading to a preference for maintaining a hawkish stance and delaying rate cuts [2]

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Foreign Exchange (FX) Market - **Key Focus**: Analysis of various currencies including CNY (Chinese Yuan), USD (US Dollar), EUR (Euro), INR (Indian Rupee), Scandi FX (Swedish Krona and Norwegian Krone), and CHF (Swiss Franc) [1][7][9][10][15] Core Insights and Arguments CNY (Chinese Yuan) - Recent strength in CNY is attributed to policy push rather than market pressure, with policymakers moving the fixing stronger despite market conditions [1] - CNY is considered significantly undervalued, comparable to the "China shock" period in the mid-2000s, supported by large export market share gains and a surge in the current account surplus [1] - Continued adjustments in CNY are expected, impacting FX markets and reducing the burden on the Euro to drive Dollar depreciation [1] USD (US Dollar) - The broad Dollar has been range-bound, but factors leading to its depreciation remain active, including a softening labor market and subpar growth expectations [7] - A significant rise in unemployment above 4.40% could impact rates-sensitive currency pairs like EUR/USD and USD/JPY [7] - Global asset allocators are likely to seek ways to hedge FX risks due to Dollar dominance, influenced by institutional governance concerns [8] EUR (Euro) - Political developments in France, including a confidence vote, are unlikely to alter the fundamental outlook for the Euro, despite potential volatility [9] - The Euro is expected to strengthen, with other currencies likely to outperform after the Euro's initial leadership in the Dollar's decline [9] INR (Indian Rupee) - The outlook for INR is clouded by new tariffs on Indian exports to the US, leading to heavy equity outflows and a return to all-time highs for USD/INR [10] - The effective tariff rate is estimated at around 32%, impacting export forecasts and current account projections [10] Scandi FX (NOK and SEK) - Both NOK and SEK are expected to strengthen against the Dollar, supported by global trends and Dollar hedging programs [10] - The upcoming Norwegian general election poses a risk for NOK, particularly regarding potential changes to the sovereign wealth fund's currency channeling policies [10] CHF (Swiss Franc) - A recommendation to short EUR/CHF is based on the belief that US importers will struggle to substitute Swiss goods, thus limiting necessary currency adjustments [15] - The risk-reward for this trade has become less favorable, but further movement towards the target of 0.93 is still anticipated [15] Additional Important Insights - The report emphasizes the importance of macroeconomic factors and policy changes in shaping currency valuations and market dynamics [1][7][9][10][15] - The analysis includes forecasts for various currency pairs over different time horizons, indicating expected movements and potential misalignments with fundamentals [21][23] - The report highlights the need for investors to consider multiple factors in their investment decisions, including geopolitical risks and economic indicators [3][27] This summary encapsulates the key points discussed in the conference call, providing a comprehensive overview of the current state and outlook of the FX market.

Group 1: Exchange Rate Influences - Exchange rates are influenced by various factors, including economic growth, inflation levels, and interest rate differentials [1] - Strong economic growth attracts foreign investment, increasing demand for the domestic currency and leading to appreciation [1] - High inflation relative to other countries typically results in depreciation of the domestic currency due to decreased purchasing power [1] - Political stability and government policies significantly impact exchange rates, with unstable environments leading to depreciation and stable ones promoting appreciation [1] - Central banks influence exchange rates through monetary and fiscal policies, including interest rate adjustments and open market operations [1] Group 2: Foreign Exchange Trading Methods - Spot foreign exchange trading is the most basic form, where transactions are settled within two business days at current market rates [2] - Forward foreign exchange trading allows parties to agree on a future exchange rate and amount, helping to hedge against currency fluctuations [2] - Foreign exchange futures are standardized contracts traded on exchanges, offering higher liquidity and regulation compared to forwards [2] - Foreign exchange options provide buyers the right to buy or sell currency at a predetermined rate within a specified period, offering flexible risk management tools [2] - The foreign exchange market is the largest and most active financial market globally, with major trading centers in London, New York, and Tokyo, enabling 24-hour trading [2]

Group 1 - Citigroup upgraded the investment ratings of CK Infrastructure and Power Assets from "Neutral" to "Buy" [1] - The target price for CK Infrastructure was raised from HKD 49 to HKD 62, while Power Assets' target price increased from HKD 48 to HKD 58, driven by potential merger benefits and the appreciation of GBP and AUD against HKD [1] - The stock rating for Hongkong Electric was downgraded from "Buy" to "Neutral" due to a 17% increase in its stock price over the past six months, with its target price adjusted from HKD 6.1 to HKD 6.6 [1] Group 2 - The forecasted dividend yields for 2025 are 4.7% for CK Infrastructure, 5.5% for Power Assets, and 5.2% for Hongkong Electric [1]

Group 1 - The Brazilian real appreciated by 1% against the US dollar in spot trading [1]