Uncertainty surrounding the economic policy in the United States under the new administration will bring financial stability to Asian markets during the first half of 2017, prominent economists and strategists of HSBC in Hong Kong said Thursday.
Several financiers of the world’s sixth largest bank by total assets said Donald Trump’s political strategies will spur economic development during the first few months of the year.
David Bloom, global head of currency strategy at HSBC, warned that the euphoria sparked by the political promises of Donald Trump of boosting employment, reviving domestic production and setting up a new tax regime, will lead to a strengthening of the US currency.
This effect will last throughout the first six months of the year, the economist explained.
The strengthening of the dollar will leave emerging markets more susceptible to dollar fluctuations, including those in Asia, in the lurch, according to Bloom.
However, the trend will be corrected in the second half of the year once the buoyancy wanes and the dollar will be devalued and Asia will experience economic growth, Bloom added.
Fluctuations in the foreign exchange market will continue for the next few months while strategic policies will spur economic development throughout the first six months, Stephen King, economic adviser at HSBC, said Thursday.
China’s economy will continue to grow although at a slower rate and the government will need to work hard to ensure the country’s economic stability, Qu Hongbin, HSBC’s chief economist for China, said.
Hongbin welcomed regulatory measures in the country which are stabilizing the real estate market.
Meanwhile, HSBC head of equity strategy for Asia-Pacific Herald van der Linde predicted that the poor performance of the Asian markets since late last year will improve during the first six months of the year and will present a good opportunity to buy shares in Asia. EFE