INSIDE ASIA: FX Mixed Again, Yen Strengthens; BOT Rate Decision
(Bloomberg) -- Asian currencies continue their mixed run this week, with yen now leading gains after yday’s fall as Brexit vote looms and bookmakers’ odds indicate U.K. will remain.
- Kiwi, Aussie and won among gainers, while Southeast Asian currencies such as baht, rupiah and Philippine peso decline
- Regional currencies remain susceptible to headlines on U.K. referendum, with mkt sentiment quickly swinging one way to another, Scotiabank FX strategist Gao Qi says
- Despite bookies pointing to remain, polls still differ on which way vote will go; NOTE: Brexit referendum in the balance
- Dollar boosted overnight as ECB’s Draghi says more stimulus in pipeline; Dollar Index broke 4-day decline yday, though slipped back this morning; now -0.11% at 93.909
- Fed’s Yellen sketches cautious view of economy in testimony
- Australia 10-yr govt bond yield up 5 bps to 2.214%; same tenor bond in China down 2 bps to 2.927%
- Yen rises 0.2% to 104.57/USD after falling 0.8% yday, biggest drop in more than two weeks; Nikkei heads for first decline in four days, with Brexit uncertainty seen taking toll
- Japan’s Ministry of Finance said to view unilateral intervention as unlikely if U.K. votes leave and yen surges; prefer G-7 joint intervention
- USD/JPY may rise or fall as much as 3 yen from 104 level after referendum: Mizuho
- Short-term risks stay bearish for USD/JPY following break to new lows, JPMorgan technical analyst Niall O’Connor writes in note
- PBOC weakens yuan fixing by 0.42%, most since May 30; CNY recovers from early loss; rises on USD profit-taking as U.K. looks more likely to remain in EU, Shanghai Commercial Bank says
- Offshore yuan pares loss; USD/CNH selling led by large Chinese banks, FX traders in Asia say
- Brexit would add to yuan woes: Chart
- PBOC’s annual report suggests China may allow foreign companies to list in country; will continue prudent monetary policy
- Central bank to permit direct CNY-KRW trading in China on June 27
- Any potential KRW inclusion in CFETS yuan basket may reduce weighting of USD, EUR, JPY by 7.5 ppts: ANZ
- PBOC could cut RRR by 50bps by end-June, Standard Chartered economists Shuang Ding and Lan Shen write in note
- Aussie rises; Westpac leading index rose 0.21% m/m in May vs downwardly revised +0.14% in April
- Kiwi heads for sixth straight day of gains; net migration at 5,500 in May vs 5,520 in April; credit card spending +5.9% y/y vs +9.1% prior month
- Korean won heading for third daily gain; N. Korea fires what appear to be two midrange ballistic missiles, S. Korean defense ministry official says; at least one seems to have failed
- Baht set to snap 3-day rally before Bank of Thailand decision today; 21 of 22 economists in Bloomberg survey expect BOT to hold policy rate at 1.50%; one sees cut to 1.25%
- USD/THB should stay above 34.765 support in coming months, Scotiabank says in note dated June 21; break above 100-DMA would open room for further upward movement
- Global investors bought net 1.6b baht in local bonds yday, third straight day of inflows: TBMA data
- Indonesia’s rupiah heading for first decline in six days; central bank says no need for special preparations ahead of Brexit vote as prudent policy framework and standard operating procedures are in place
- Peso falls for second day ahead of Philippine central bank meeting tomorrow; economists expect BSP to hold rates; ING forecasts 25-bp hike in 4Q
- Duterte’s new environment minister criticizes “pathetic” record of mining industry
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
People Ding Shuang (Standard Chartered PLC)
Lan Shen (Standard Chartered PLC)
Qi Gao (Bank of Nova Scotia Asia Ltd/Singapore)
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