Goldman Sachs Names the Asian Currencies Riding the AI Boom. South Korea and Taiwan Are Leading

Artificial intelligence is no longer just reshaping the technology industry but also increasingly determining which Asian currencies outperform their regional peers, with countries tied to semiconductor manufacturing and AI supply chains emerging as some of the biggest beneficiaries.

In a research report cited by CNBC, Goldman Sachs said the region's foreign exchange market has effectively split into two camps. Economies benefiting from booming AI investment and chip exports, including South Korea, Taiwan, Singapore and Malaysia, have seen their currencies outperform nations more vulnerable to rising energy costs, such as Thailand, Indonesia and the Philippines.

"The two main drivers of Asian macro markets this year have been the energy supply shock and the AI-related investment boom," Goldman analysts wrote.

Higher oil prices, a hawkish Federal Reserve, geopolitical tensions in the Middle East and a relatively stable Chinese yuan have helped push the U.S. Dollar Index up nearly 3% this year. Even so, Goldman believes the divergence within Asia is likely to continue as long as global investment in AI infrastructure remains strong.

South Korea stands out. Goldman said the country's semiconductor industry, which has been fueled by surging demand for AI chips and memory products, has driven its current account surplus to record highs. Economists cited by the bank expect that surplus to nearly double to almost $300 billion this year, equivalent to roughly 13.9% of South Korea's gross domestic product.

Earlier this year, heavy foreign selling of Korean equities weighed on the South Korean won. However, Goldman said those outflows have slowed considerably, allowing the country's strong trade fundamentals to support the currency once again. "Reduced foreign equity outflows has lessened offset to surging current account surplus, paving way for [the won's] rally," the report said.

Taiwan is another major beneficiary of the AI boom. Goldman expects the Taiwan dollar to continue outperforming thanks to robust semiconductor exports that have generated one of Asia's largest trade surpluses.

According to the bank, Taiwan's current account surplus could reach 25% of GDP this year, while exports have expanded at an extraordinary pace of between 40% and 70% for much of 2026.

Although policymakers are expected to leave interest rates unchanged, Goldman said booming technology exports and significant U.S. dollar deposits should continue supporting the Taiwanese currency.

China also received a favorable outlook despite broader concerns about its economic slowdown. Goldman noted that the Chinese yuan has been Asia's only currency to appreciate against the U.S. dollar this year. Analysts attributed that resilience to strength in advanced manufacturing and high-tech industries, even as other parts of China's economy remain weak.

"China's economy is being propelled by strong performance in high-tech manufacturing and related sectors, while activity across the broader economy remains subdued," the report said.

The investment bank maintained its 12-month forecast for the dollar-yuan exchange rate at 6.50, arguing the Chinese currency remains undervalued. Strong exports and Beijing's efforts to further internationalize the yuan are expected to provide additional support.

Not every technology-oriented economy received an equally optimistic assessment. Goldman remains neutral on Singapore's dollar despite resilient AI-led economic growth and low inflation.

The bank said the Monetary Authority of Singapore's decision to keep policy broadly unchanged had limited additional upside for the currency, although the central bank surprised markets Monday by tightening monetary policy.

Meanwhile, the bank remains bearish on Thailand's baht and Indonesia's rupiah.
Thailand continues to struggle with weaker gold prices and declining real interest rates, while Indonesia faces ongoing concerns surrounding policy uncertainty and governance despite efforts to attract foreign investment.

Goldman also warned that the Philippine peso remains especially vulnerable to elevated oil prices because the country relies heavily on imported energy. Although India's rupee has not benefited directly from the AI investment cycle and has remained under pressure this year, Goldman turned constructive on the currency over the next three months.

The bank said recent measures by the Reserve Bank of India to attract foreign capital, combined with relatively lower oil prices, could help stabilize the rupee. Malaysia's ringgit also earned a bullish outlook. Goldman cited resilient AI-driven economic growth, strong exports and continued foreign direct investment as reasons the currency could continue strengthening.

Overall, Goldman maintains bullish three-month forecasts for the Chinese yuan, South Korean won, Taiwan dollar, Indian rupee and Malaysian ringgit, while remaining bearish on Thailand's baht and Indonesia's rupiah.