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11 Mar 2015
Asian FX mostly succumbs to the USD rally – ING
FXStreet (Barcelona) - Tim Condon of ING, assesses the performance of Asian currencies with respect to the broad-based USD strengthening.
Key Quotes
“The EUR has depreciated 1.35% since last Friday. We see the causality running from the US jobs report to currencies to oil, which has fallen 4.7% to trade with a $48 handle. Given the drop in oil, the KRW’s larger depreciation compared with the MYR (2.13% vs. 1.46%) represents a reversal of the pattern in the second half of last year.”
“INR, SGD and IDR constitute a second tier of Asian currencies, having depreciated by 0.90% to 0.97%.”
“PHP, THB, TWD and JPY constitute a third tier, having depreciated by 0.25% to 0.50%.”
“The outliers are CNH and CNY, which are flat against the USD. It’s not for lack of trying; the PBoC depreciated the CNY fixing by 0.05% on Monday, the first trading day following the release of the US jobs data, and by another 0.01% yesterday. Nor do we think hot money outflows turned into inflows.”
“We attribute the outperformance of CNY and, through arbitrage, CNH, to exchange market intervention related to the Two Conferences. We recently revised our yearend USDCNY forecast to 6.36 (spot 6.26, Bloomberg consensus 6.20, NDF 6.37).”
Key Quotes
“The EUR has depreciated 1.35% since last Friday. We see the causality running from the US jobs report to currencies to oil, which has fallen 4.7% to trade with a $48 handle. Given the drop in oil, the KRW’s larger depreciation compared with the MYR (2.13% vs. 1.46%) represents a reversal of the pattern in the second half of last year.”
“INR, SGD and IDR constitute a second tier of Asian currencies, having depreciated by 0.90% to 0.97%.”
“PHP, THB, TWD and JPY constitute a third tier, having depreciated by 0.25% to 0.50%.”
“The outliers are CNH and CNY, which are flat against the USD. It’s not for lack of trying; the PBoC depreciated the CNY fixing by 0.05% on Monday, the first trading day following the release of the US jobs data, and by another 0.01% yesterday. Nor do we think hot money outflows turned into inflows.”
“We attribute the outperformance of CNY and, through arbitrage, CNH, to exchange market intervention related to the Two Conferences. We recently revised our yearend USDCNY forecast to 6.36 (spot 6.26, Bloomberg consensus 6.20, NDF 6.37).”