INDIA AND ASIA FOREX MARKET REPORT - 09 September 2014 The rupee gained over the start of the week from US dollar losses after Fridays US job data releases and the overall support from oil price easing and gold imports curb. However, the currency dropped off in early morning trading today due to importers US dollar demand. The rupee had gained momentum after US non-farm payrolls showed weaker than expected results, even though the gains were somewhat capped by the RBI. The knock took some negative sentiment over the reviving economy and raised suspicion that the Fed may hold interest rates near zero despite Yellen’s address last month. At the Jackson Hole meeting Yellen had said that policy makers may raise interest rates sooner than anticipated which would in turn decrease the attractiveness of emerging market assets. Since then Rajan has stipulated that the RBI is preparing for any US Fed rate hike. The currency also showed recovery from increased exporters US dollar selling as well as sustained foreign fund inflows. The pound plummeted on Monday upon the opinion poll showing support for Scottish Independence where 51% favoured parting ways. This softened the pound against other majors. Other domestic factors include inflation data that gets released on Friday and the RBI review towards the end of the month which is bound to influence the rupee. In early trade this morning the rupee knocked off by 17 paise against the US dollar due to importers US dollar demand. PHP The Philippine peso turned down after hitting its strongest in more than three weeks last week Thursday as most emerging Asian currencies eased on month-end corporate dollar demand. The peso reversed direction on month-end dollar demand from local companies while broad weakness in regional peers prompted investors to cover short positions. The peso closed at P43.71 against the US dollar late yesterday. THB The Thai baht rose for a third month and bonds gained as the military-led government stoked an economic recovery, spurring inflows to the nation’s stocks. The currency appreciated 0.5% in August to 31.954 per dollar, taking its three-month advance to 2.7 %, the best among 24 emerging-market exchange rates tracked by Bloomberg. JPY Yesterday, the housing starts in Japan registered a drop of 14.1% in July, on an annual basis, beating market expectations for a fall of 10.5% and compared to a drop of 9.5% in the prior month. However, the construction orders in the nation registered a rise of 24.4% (Y-o-Y) in July, against a rise of 9.3% in the prior month. This led to the USD strengthening by 0.34% against the JPY and closed at 104.05 in late Monday trade. MYR On Friday (05/09), the MYR looked set to record its biggest weekly drop in at least one month on bets that the buoyant U.S. economy will push the Federal Reserve to hike interest rates sooner than anticipated. The ringgit declined 0.2%. The strengthening U.S. economy is creating expectations that U.S. rates will rise sooner rather than later which places increased pressure on emerging market currencies like the MYR. The MYR remained largely unchanged throughout yesterday (08/09). IDR Contrary to the positive performance of the benchmark stock index of Indonesia on Monday’s trading day (08/09) and despite positive domestic economic data released by Statistics Indonesia, the Indonesian rupiah exchange rate depreciated 0.22% to IDR 11,716 per US dollar on Monday (08/09). The main reason for the currency’s depreciation is the strengthening US dollar as US economic data are improving and inflation is slowing in the Eurozone. WON South Korean exports fell 0.1%in August from a year earlier, compared with the 0.8% drop that was forecast, official data showed yesterday. The trade surplus was $3.4 billion, more than the $2.9 billion median estimate. The won declined early yesterday, but rose on following the release of a private gauge showing U.S. consumer confidence increased in August. The won rose on Monday (08/09), reversing an earlier decline, on speculation exporters sold dollars to convert overseas earnings before the Chuseok holidays.
Posted on: Tue, 09 Sep 2014 10:36:26 +0000
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