INSIDE ASIA: Ringgit, Yuan Drop Before U.S. Non-Farm Payrolls
(Bloomberg) -- Malaysia’s ringgit and China’s onshore yuan decline while Singapore’s dollar gain as Dollar Index rises for 3rd day ahead of U.S. non-farm payrolls on Friday. Aussie dollar climbs after retail sales beat est. before trimming gains on slower China services PMI.
- Asian currencies have strengthened sharply over a very short period and some indicators now show that move is overdone, RBC Capital Markets Asia FX strategist Sue Trinh says in interview, adding that consolidation is overdue
- All comes down to U.S. non-farm payrolls; an above consensus outcome will put a floor under USD/JPY and USD/Asia in general
- China lowers yuan reference rate by most since Aug. 13
- April Caixin services and composite PMIs both declined from March to 51.8 and 50.8 respectively
- Nation will not try to devalue the yuan to seek a trade surplus as market-determined yuan rates and balanced international trade are in the nation’s interest: Xinhua
- USD/CNH sold above 6.5200 by Asia-based leveraged investors, according to FX traders in North Asia
- Aussie snaps two-day drop against dollar
- Retail sales climbed 0.4% m/m in March after revised 0.1% increase in February; est. was 0.3% gain
- Trade deficit narrows to A$2.16b ($1.62b) in March, least in a year; est. was for A$2.9b shortfall
- Intraday investors pared Aussie longs after China April services PMI came in lower than previous month, according to an Asia-based FX trader
- Hong Kong’s dollar little changed; city is said to crack down on illegal money flows from China, Reuters reports
- Retail sales value due today; est. -8.8% y/y in March vs -20.6% in February
- Taiwan’s dollar little changed; April CPI rose 1.88% y/y, least in three months vs. est. 1.50%
- Peso declines for second day; April inflation rose 1.1% y/y vs est. 1.2%
- Japan, South Korea, Thailand, Indonesia closed for holidays
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HALISTER1Source: BFW (Bloomberg First Word)
People Sue Trinh (Royal Bank of Canada)
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