Halister News

(Bloomberg) -- Most Asian currencies decline as dollar heads for second day of gains and PBOC cuts yuan fixing to weakest in 2 months. S. Korea central bank holds the policy rate unchanged at record low of 1.5%.

• Asian currencies retreated today mainly on the back of a firmer USD, with market reassessing the extent of rate hikes priced following recent Fed speeches, Khoon Goh, senior FX strategist at ANZ says in interview
  • Weaker yuan fix, at lowest since early March, also likely weighed on Asian currencies
  • Slight rise in oil prices not enough to prevent the ringgit from opening weaker
  • Philippine peso is giving back some of its gains following the post-election relief rally
• Korean won trims early losses after BOK governor Lee says current rate is not insufficient to support economy
  • BOK held the benchmark interest rate unchanged for an 11th consecutive month and said it will closely monitor progress of corporate restructuring and changes in monetary policies of major countries
  • Further easing more likely than not in coming mos. amid rising pressure on BOK to support Korea’s economy and aid corporate restructuring: Capital Economics
• Malaysian ringgit set to snap two-day gain after overnight increase in Dollar Index and ahead of local GDP
  • 1Q GDP growth est. 4.0%; data due 12pm local time
  • Malaysia’s 5-year interest-rate swaps may extend losses toward levels last seen in late 2013 if 1Q is confirmed as weakest quarter since 2010: analysis
• China yuan weakens after PBOC sets reference rate at weakest level since March 4 as dollar strengthened overnight
  • New loans, M2, industrial production data due before end of weekend; industrial output expected to ease slightly as govt eyes reforms, see PREVIEW
  • Country may be steering a “managed depreciation” of its currency despite allowing the fixing to be more predictable to enhance the communication channel: Commerzbank
  • The market is getting pessimistic about the yuan, as recent data suggest that the economy slowed in April and the dollar resumed strength,’’ said Banny Lam, Hong Kong-based co-head of research at Agricultural Bank of China International Securities
• Aussie drops for second day on weak sentiment in Asian equity markets and broad dollar strength
  • Morgan Stanley suggests being structurally short AUD/JPY, in note received today; currencies with substantial foreign funding need to face devaluation risks as asset volatility increases
• Yen gains; USD/JPY remains below 109.85, conversion line on weekly ichimoku chart
• Prime Minister Abe is shifting his economic policies to the left in bid to broaden his appeal ahead of election this summer