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Robin Brooks observes that Asia's current account surpluses are soaring. Despite this, regional currencies are not appreciating as financial theory would suggest.
Brooks points out that China is actively intervening through its state banks to keep the Yuan's value suppressed. He adds that similar interventions are taking place in Korea and Taiwan, leading to continued currency weakness despite strong external balances.
Brooks has recently weighed in on global commodity markets. He assessed how a possible peace deal could reduce the risk premium in Brent, allowing prices to fall to $85 a barrel and lowering U.S. gas prices to $4 per his analysis. In an earlier commentary, Brooks predicted Brent would likely stay in an $80-90 range due to continuing war-related risks and heightened premiums.