INDIA AND ASIA FOREX MARKET REPORT - 01 JULY 2014 INR The Indian Rupee begun the week on a bit of a high due to initial gains of the weakened US Dollar from poor US data releases particularly in GDP reduction, thereafter the currency tippled down. This was largely attributed to the month-end demand by oil importers. Other than the RBI’s continual intervening, the concerns over the Iraq crisis has weakened the rupee over the past two weeks. India’s oil retail price is expected to increase by around 2.8%. Overall the global concerns have immobilised the hype surrounding Modi’s election win. The rupee is expected to remain in range until the first budget speech by the new government that takes place on the 10 July 2014. Modi has made renewal adjustments to India’s labour laws and intentions are to follow in further plans to revive the economy, boost manufacturing and increase job creation. Other events to look out for is China’s manufacturing and service data being released today, 3 July 2014. HKD Better than expected trade data (for May) out of Hong Kong bolstered the HKD and provided some much needed positive economic data from the island nation, as Hong Kong’s foreign currency reserves have been under significant pressure in the first four months of 2014. SGD The Singapore dollar eased 0.2% to 1.2529 per the US dollar, its weakest since June 6. Singapores non-oil domestic exports unexpectedly fell in May on weak shipments of electronics and pharmaceuticals to its key markets, indicating the city-state may not be benefiting yet from a recovery in developed economies. IDR The Indonesian rupiah had the strongest depreciation of the week among Asian currencies at 0.82% against the US dollar, spiking above 12,000, with a sell down in equity markets and leading into the first round of presidential elections in early July. THB The THB rose 1.2% in June to 32.449 per dollar in late trading yesterday, the third-best performance among 24 emerging-market currencies. An increase in government spending and a rebound in private consumption are providing the impetus this rapid appreciation. MYR The ringgit gained 0.05% against the US dollar in range trade, supported by downtick 1-month NDF rate, steady Chinese CNY fixing, and slight equity inflows despite some upward pressure on cross SGD/RM. WON The South Korean WON gained 0.13% against the USD benefiting from rising equity inflows as part of quarterly portfolio rebalancing.
Posted on: Tue, 01 Jul 2014 13:21:23 +0000