Halister News

(Bloomberg) -- Asian currencies strengthen broadly against the dollar, led by the yen & the ringgit, as regional equities and oil prices advance amid growing confidence a Fed rate rise won’t derail the global economy.

• Dollar index falls, set for two straight days of losses
• There’s some adjustment from recent dollar strength amid lack of significant incentives to further buy up USD, says Kozo Hasegawa, Bangkok-based FX trader at Sumitomo Mitsui Banking Corp.
  • Gains in crude oil prices and stocks are supportive for emerging market currencies; EM currency moves continue to be driven by factors in the U.S.: Hasegawa
• Brent crude oil price rises above 50$/bbl for first time since Nov., MSCI Asia Pacific Index gains 0.7%
• Yen advances as Japan Vice Finance Minister Asakawa’s interview with the FT suggests that intervention is less likely
  • “However, the key quote is from 10 days ago,” Joseph Capurso, senior currency strategist at CBA in Sydney says, adding USD/JPY may have over-reacted
  • Some investors may also be unwinding intra-day long position amid thin liquidity conditions, says Kyosuke Suzuki, Tokyo-based FX and money market sales at Societe Generale
• Yuan gains after PBOC raises daily reference rate by 0.21% to 6.5552/USD, a day after setting the fixing at weakest since 2011
  • Market consensus has shifted; doesn’t believe yuan is set for much bigger devaluation, as in evidence yday when weakest CNY fixing since 2011 had little impact, says W. Brad Bechtel, managing director at Jefferies
  • Yuan transactions fell by 1.82% m/m in Swift RMB Internationalization Tracker; it ranks as sixth-most widely used currency for global transactions vs fifth a year earlier
• Southeast Asian currencies gain for a second day, with ringgit leading advance on higher oil prices
  • Thai baht is moving in line with other currencies, BOT Governor Veerathai says today
  • Economy has good buffers and can weather global volatility;

Thailand has less foreign debt and higher liquidity than many other countries, he says ** Philippines Presumptive President Duterte says some of his choices turn down offer for Cabinet posts & are asking for higher pay, allowance ** Philippine banks face additional liquidity requirement under Basel 3 framework: BusinessWorld ** Singapore set to release April industrial output at 1 pm local, with data likely to show that it fell 0.2% y/y vs -0.5% prior, according to Bloomberg survey

• Dollar strength will resume in run-up to June-July FOMC meeting as risk appetite fueled by rebound in oil prices isn’t sustainable, Scotiabank’s strategist Qi Gao writes in note today
  • Regional currencies are expected to remain vulnerable to resurfacing concerns over Fed’s tightening and potential external uncertainty in June including Brexit referendum
• Australian dollar falls after 1Q business investment dips 5.2% q/q vs est. 3.5% drop
  • Chinese yuan’s reaction to any Fed hike in June may affect whether RBA chooses to hold rates in coming months, says market strategist Honglin Jiang of Credit Suisse
• New Zealand dollar declines after Fonterra’s 2016-17 forecast a lower-than-expected milk payout
  • New Zealand raises surplus forecasts as tax revenues improve; leaves door for tax cut at next year’s election