The Singapore Dollar, The Indonesian Rupiah, Malaysian Ringgit, Philippines Peso Points Of Discussion
- The U.S. Dollar gained against its ASEAN-FX counterparts last week
- For more earnings, FOMC minutes and the us-China tensions on the eyes
- Downside risks include the balance sheet of the Fed and the fiscal stimulus
- Bank Indonesia may reduce the rate of repeat intervention efforts
The US Dollar is the Weekly MEETING of the Recap
The US Dollar has been the only upside progress last week against most of its counterparts in the ASEAN such as the Singapore Dollar, the Malaysian Ringgit and the Philippine Peso. From a technical point of view, there is could be cream, for further near term gains, again. A notable exception is the Indonesian Rupiah, which managed to find some traction against the Usd.
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What is the path to follow for the U.S. Dollar?
The central theme of the USD relative to some of its Southeast Asian peers remained on the broader market sentiment, rather than regional factors as expected. In this regard, the MSCI Emerging Markets Index (EEM) has fallen to the side of the S&P 500 index. A couple of factors at the origin of the acidification of the market mood appeared to have been Fed Chairman, and Jerome Powell, a miner it depends on the quality and flow of paris of central bankers, also played a doubt on the uncertainty of the growth.
During this time, the Bank of Indonesia has expressed its views on the exchange rate, stating that it sees the Rupee as under-valued. The central bank reiterated on the efforts to intervene in its currency. Yet, at the same time, investors may see more aggressive efforts, with the utmost attention must capital outflow risks increase. For the moment, it seems that the IDR has been able to find the support behind the Bank Indonesia efforts.
Last Week’s US Dollar Performance and,
The ASEAN-Based on the US Dollar Index for averages, USD/SGD USD/IDR, USD/MYR and USD/PHP
External Event Risk – FOMC minutes, and Jerome Powell, us-China Tensions, the u.s. Fiscal Stimulus
In the coming week, and more updates are due from the central bank of the largest economy in the world. The The minutes of the FOMC meeting the Class could develop on some of these uncertainties, policy makers are anticipating in the medium term. Chairman, and Jerome Powell will also be speaking, and it may be that to reiterate a recent cautious commentary as nations look to gradually ease locking action.
During this time, in the background, the united states and China, and tensions appear to be simmering. Last week, the President, when He showed hesitation to talk to his Chinese counterpart, Xi Jinping. He threw around the ideas of cutting links with China, as the latter urged the united states back on its ” cold war mentality’. This comes as the White House looks at the way China handled the outbreak, or Covid-19. If a trade war fears are rekindled, which could sour feeling.
Unemployment insurance claims from the united states are expected to increase by approximately $ 2.5 million, and all of this can be the price, it may be more of a dent in the overall consumption. This is the most important segment, or GDP, and retail sales plunged in April by a record, while missing expectations. Contributing to the perception of support from the Fed to initiate the purchase of debt securities of corporations, resulting in the fastest increase in its balance sheet in about 3 weeks.
Greater certainty in the other tax measures can also provide relief for nervous investors. While the republicans have expressed doubts about the viability of Democracy, has offered US $ 3 billion package, ” House Speak Nancy Pelosi said she is open to negotiation. On balance, it could be directed towards what may be a mixed week for the US Dollar, as it conversely follows relative to the ASEAN currency.
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MEETING, Event Risk, the Bank of Indonesia, Singapore, the GDP May cross the Wires
Focusing on ASEAN-specific event risk, the Bank Indonesia, the monetary policy announcement is due on Tuesday. The central bank should reduce the 7-day reverse repo rate by 25 basis points to 4.25% from 4.50%. If the Bank of Indonesia to continue stressing the need for foreign exchange intervention, the Rupee could take his land. It can also be a chance to Singapore releases the finalization of the reading on first-quarter GDP. The window 5/19 – 5/26. But, the USD/SGD could focus on broader market sentiment down the road.
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The ASEAN-Based on the USD Index Versus the MSCI Emerging Markets Index (Daily Chart
Chart Created Using TradingView
— Written by Daniel Dubrovsky, a Currency Analyst to DailyFX.com
To contact Daniel use the comments section below, or @ddubrovskyFX on Twitter