Positioning For A Weak Dollar

Standard Chartered Bank is maintaining an 'Overweight' stance on global equities, anticipating a constructive yet volatile second half of 2025. The bank's positive outlook is largely underpinned by expectations of a weaker US dollar, global policy easing, and a strong probability of the US economy achieving a soft landing.
In its latest market outlook, Standard Chartered highlights that a weakening US dollar historically benefits global equities, particularly non-US assets. Consequently, the bank has upgraded its position on Asia ex-Japan equities to 'Overweight,' signaling confidence in the region's growth prospects. They also favor 5-7 year maturities in US dollar bonds and have upgraded Emerging Market (EM) local currency bonds to 'Overweight,' noting their potential to benefit from a weaker greenback and anticipated rate cuts by EM central banks.
'Policy easing worldwide, strong chances of a US soft landing, and a weaker USD are supportive of risky assets,' stated the bank in its report. 'We favour diversified global equity exposure.'
The second quarter of 2025 has been characterized by significant market fluctuations, including events such as 'Liberation Day' (referring to the transition of Nifty contracts to SGX GIFT City in July 2023) and ongoing Middle East tensions. Despite this volatility, global equities have seen an approximate 8% gain quarter-to-date.
Looking ahead to H2 2025, Standard Chartered expects economic and earnings growth to remain constructive. The US economy, despite earlier soft survey data, has shown resilience in 'hard data,' supporting the bank's belief in a soft landing scenario. This is further bolstered by supportive fiscal and monetary policies across the US, Europe, and Asia.
However, the bank cautions investors to remain vigilant against several key risks. The end of President Trump's 90-day tariff 'pause' in early July is a point of concern, with Standard Chartered expecting extensions that may be accompanied by heightened rhetoric in trade discussions. Ongoing conflicts in the Middle East and between Ukraine and Russia also continue to simmer, with the former posing a potential, though likely brief, risk of higher energy prices.
Standard Chartered's base case anticipates these risks will result in temporary, rather than sustained, volatility. The top three risks closely monitored by the bank include:
A sustained rise in trade tariffs. A significant jump in oil prices due to geopolitical events. A sudden decline in US hard economic data towards recessionary levels.
To mitigate these risks and navigate potential temporary volatility, Standard Chartered identifies Gold and Alternative Strategies as attractive diversifiers for investment portfolios.

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

The Sun

3 hours ago

• The Sun

Malaysia–US tariff talks making good progress

KUALA LUMPUR: Malaysia's discussions with the United States (US) Trade Representative and the US Secretary of Commerce on ongoing tariff-related negotiations have made good progress, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz He said both Malaysia and US representatives have expressed their intention to finalise negotiations before the expiry of the 90-day pause on tariff implementation, and agreed to intensify efforts to reach an agreement acceptable to key stakeholders in both countries. In a statement today, he highlighted that the US has been one of Malaysia's top three export markets over the past decade. 'In May 2025, exports to the US recorded the eighth consecutive month of double-digit growth,' he said. A significant share of Malaysia's exports to the US supports and complements US domestic industries in sectors such as electrical and electronics (E&E), semiconductors, medical devices, machinery, equipment, and parts. Malaysia also serves as a key supplier of intermediate goods to US-based manufacturing industries. 'MITI has remained steadfast in upholding Malaysia's interests in all trade and investment relations, particularly in safeguarding the integrity of Malaysia's domestic commitments and sovereign rights,' he added. He further stated that MITI anticipates the negotiations will help secure Malaysia's supply chains and deliver positive spillovers to local businesses, especially small and medium enterprises (SMEs), while also creating more high-paying jobs for Malaysians. 'These efforts will further strengthen Malaysia's position as a preferred investment destination in the region and drive the MADANI economic transformation agenda towards becoming a high-tech, high-income nation,' said Tengku Zafrul. Tengku Zafrul led a working visit to Washington, US, from June 18-20, 2025. The visit focused on continuing US tariff-related engagement and negotiations with US Trade Representative Jamieson Greer and US Secretary of Commerce Howard Lutnick. He was accompanied by MITI's chief negotiator, the Deputy Chief of Mission from the Embassy of Malaysia, and MITI officials based in Washington.

New Straits Times

4 hours ago

• New Straits Times

Trade talks 'progress well', Malaysia and US aim to finalise before 90-day deadline

KUALA LUMPUR: Malaysia says its trade talks with the US in Washington DC are progressing well, about two weeks before the 90-day pause of the latter's unilateral tariff implementation expires. Malaysia said both parties had agreed to intensify efforts toward a mutually acceptable outcome for key stakeholders in the two countries. The country faces a 24 per cent tariff on certain exports to the US unless both sides reach an agreement before the 90-day pause ends on July 8. Investment, Trade and Industry Ministry today said its separate meetings with US Trade Representative ambassador Jamieson Greer and US Secretary of Commerce Howard Lutnick had made positive progress. "The Malaysian delegation led by Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz ensured that the meetings with the US Trade Representative and the US Secretary of Commerce was also optimised as a platform to enhance bilateral investment and trade ties between Malaysia and the US. "These will also form part of the expected outcome of the negotiations, which the ministry hopes will be finalised before the end of the 90-day pause on tariff implementation," it said in a statement. Tengku Zafrul, who led a working visit to Washington DC on June 18, said the negotiations are expected to boost Malaysia's supply chain resilience. He added that the outcomes could benefit local small and medium enterprises (SMEs) and generate more high-paying jobs for Malaysians. "All these will further strengthen Malaysia's position as a choice investment destination in the region, while driving the Madani economic transformation agenda towards a high-tech and higher-income nation," he added. Tengku Zafrul said Malaysia's exports to the US recorded their eighth straight month of double-digit growth in May 2025, with the US remaining one of the country's top three export destinations over the past decade. He noted that a significant portion of these exports supports US domestic industries, particularly in sectors like electrical and electronics, semiconductors, medical devices, machinery, equipment and components. "Malaysia has also been an important source of intermediate goods to US-based manufacturing industries. "The ministry has also remained steadfast in doing its utmost to uphold Malaysia's interests in all trade and investment relations with all trading partners, particularly in maintaining the integrity of Malaysia's domestic commitments and its sovereign rights," he said.

New Straits Times

4 hours ago

• New Straits Times

Trade talks 'progressing well', Malaysia and US aim to finalise by 90-day deadline

KUALA LUMPUR: Malaysia and the United States are aiming to finalise tariff negotiations before the 90-day pause on implementation expires, with both parties agreeing to intensify efforts toward a mutually acceptable outcome for key stakeholders in both countries. Investment, Trade and Industry Ministry today said its separate meetings with US Trade Representative ambassador Jamieson Greer and US Secretary of Commerce Howard Lutnick had made positive progress. "The Malaysian delegation led by Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz ensured that the meetings with the US Trade Representative and the US Secretary of Commerce was also optimised as a platform to enhance bilateral investment and trade ties between Malaysia and the US, while also. "These will also form part of the expected outcome of the negotiations, which Miti hopes will be finalised before the end of the 90-day pause on tariff implementation," it said in a statement. Tengku Zafrul, who led a working visit to Washington DC on June 18, said the negotiations are expected to boost Malaysia's supply chain resilience. He added that the outcomes could benefit local small and medium enterprises (SMEs) and generate more high-paying jobs for Malaysians. "All these will further strengthen Malaysia's position as a choice investment destination in the region, while driving the Madani economic transformation agenda towards a high-tech and higher-income nation," he added. Tengku Zafrul said Malaysia's exports to the US recorded their eighth straight month of double-digit growth in May 2025, with the US remaining one of the country's top three export destinations over the past decade. He noted that a significant portion of these exports supports US domestic industries, particularly in sectors like electrical and electronics (E&E), semiconductors, medical devices, machinery, equipment, and components. "Malaysia has also been an important source of intermediate goods to US-based manufacturing industries. "The ministry has also remained steadfast in doing its utmost to uphold Malaysia's interests in all trade and investment relations with all trading partners, particularly in maintaining the integrity of Malaysia's domestic commitments and its sovereign rights," he said.