INSIDE ASIA: Yuan Touches Six-Year Low, Most Currencies Decline
(Bloomberg) -- Most Asian currencies decline, led by Korean won, as the dollar strengthens after ECB’s Draghi remains guarded on QE, signaling it won’t come to an abrupt end.
- Asian currencies are under pressure today, with dollar strengthening particularly against EUR and GBP, CBA foreign- exchange strategist Andy Ji says
- Fed hike path and U.S. presidential election remain key issues
- Yuan reaches a six-year low in both onshore and offshore markets, with the currency getting tested after PBOC signaled tolerance for a weaker rate with its fixing
- CNH falls as much as 0.3% to 6.7678 vs USD, weakest since September 2010, with the trading taking place as Hong Kong is beset by a typhoon
- CNH decline suggests continuation of downtrend as Chinese economy is expected to weaken, says Stuart Allsopp, head of financial market strategy at BMI Research
- Net yuan outflow by Chinese banks, on behalf of clients, surges 61% to record $44.7b in September from the prior month, according to data released by SAFE; outflow shows concerns about yuan depreciation, according to OCBC
- SAFE hasn’t seen panic purchases of foreign currencies in China, which shows supply and demand pressure is easing, a senior SAFE official says
- New home prices rose m/m in 63 cities out of 70 in September, down from 64 cities in August. Prices dropped in six cities vs four a month ago, as the government steps up curbs
- Yen fluctuates as a 6.6 quake in parts of the country triggers a decline in equities
- BOJ Governor Kuroda says it’s possible that price outlook may be altered; 80t yen bond-buying target allows for some flexibility and it’s possible purchases would be lower
- Former board member Shirai says BOJ new framework is implicit tapering; central bank may buy less than the annual target of JGBs to maintain 10-year yield at more or less around zero percent: according to Norinchukin Research Institute
- Downside risk on USD/JPY may be limited on buy-on-dip flow, says Takashi Kudo, head of corporate sales at Moneysquare Japan
- Aussie gains, while kiwi drops
- Goldman Sachs sees RBA beginning tightening cycle early 2018
- Case for correction toward 0.74 by year end if Fed tightens in December: Westpac
- New Zealand proposes changes to rules governing dairy market, Fonterra
- Won fell for third straight week
- KRW, MYR and SGD most vulnerable to Fed rate hike in December, Scotiabank writes in note today; recommends buying USD against basket of KRW, MYR and SGD with equal weight, targeting 2.5% gain in coming weeks
- Ringgit little changed ahead of Malaysia’s 2017 budget scheduled for release at 4pm local time
- Nation CPI rises 1.5% y/y vs est. +1.8%; foreign reserves rise to $97.8b as at Oct. 14
- Baht falls; foreign-exchange reserves fall 1.9% to $179.6b, BOT says today
- Entertainment and consumption-related activities may slow during one-year mourning period following death of the king, says BOT Governor Veerathai Santiprabhob
- Sept. exports may still stay positive for second straight month on rising overseas orders, Deputy Commerce Minister Suvit Maesincee says
- Peso falls 0.5%, first decline in four days
- Duterte declared “separation from the U.S.” late Thursday during visit to China; U.S. says it is baffled by the comment
- Philippines to see $13.5b in economic and finance deals from visit to China, Trade Secretary Lopez said yesterday
- Monetary policy settings remain appropriate, central bank says in inflation report
- Interest rates remaining low in Europe may drive portfolio flows to Philippines as investor search for yields, Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo says
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
Tickers 2539Z GR (European Central Bank)
People Andy Ji (Commonwealth Bank of Australia)
Diwa Guinigundo (Bangko Sentral ng Pilipinas)
Stuart Allsopp (Business Monitor International Ltd)
Takashi Kudo (MONEY SQUARE HOLDINGS Inc)
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