(Bloomberg) — Asian currencies from economies tied to the artificial intelligence boom are poised to benefit the most against a sliding dollar next year, according to Sophia Drossos, a strategist and economist at Point72 Asset Management.
Drossos said the dollar will continue weakening going into 2026 — albeit at a slower pace than the 7.1% fall so far this year. The beneficiaries of that decline, she said, will likely come from Asian countries whose currencies have lagged big AI-related equity rallies.
“As the AI theme broadens globally, I’d be looking at China and Korea,” she said in an interview in New York. “Korean equities have really outperformed this year, but the currency is still relatively weak.”
Shares in Asian technology companies have boosted emerging-market equities this year, with an index of Korean stocks jumping about 70% and China’s rallying more than 35%. The won and yuan, meanwhile, have failed to keep pace, which Drossos said makes them prime candidates for gains in 2026.
The won has risen about 1% so far in 2025 after four straight years of losses. The offshore yuan has gained more than 3% in the same period on easing US-China trade tensions, but it’s only the fifth best performing Asian currency this year.
In the US, fresh economic data that will begin flowing now that the federal government shutdown has ended is likely to show the economic growth is moderating, Drossos said. That will pave the way for the Federal Reserve to cut interest rates in December, resulting in a weaker greenback.
All of the currencies in the Group of 10 have gained against the dollar this year, which has been hit by trade tensions and concerns over the economic outlook. The Bloomberg Dollar Spot Index is hurtling toward its worst year since 2017, even as US stock indexes have posted record highs.
“Even though the US has done well, other countries have done even better,” Drossos said. “Global investors have taken advantage of cheaper valuations in other economies.”
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