HALISTER1: INSIDE ASIA: Most Asian FX Exend Rally on Position Adjustments

INSIDE ASIA: Most Asian FX Exend Rally on Position Adjustments

(Bloomberg) -- Most Asian currencies gain for a second day, led by Malaysia’s ringgit and South Korean won, on relief rally and position adjustment in the aftermath of Brexit.
  • Unlike Lehman crisis, there’s no immediate impact on the actual economy from the U.K.’s decision to leave EU, says Toru Nishihama, emerging-market economist at Dai-ichi Life Research Institute by phone
    • Therefore, there’s probably some profit taking or position adjustment from sell-offs right after the vote results
  • Dollar Index is set for two-day losses following 0.3% decline yesterday
    • MSCI Asia Pacific index rises 1.3% and Brent oil prices advance 0.6%
  • South Korea’s won extends gains following 1% rally yesterday
    • Finance Minister Yoo told lawmakers that he doesn’t think more currency swaps are needed now to tackle risks from U.K. vote to exit EU
  • Offshore yuan is set to snap four-day losses on speculation PBOC may be backing the currency; onshore yuan steady
    • PBOC boosts yuan reference rate for first time in four days, setting fixing level at 6.6324 vs 6.6528 day earlier
    • Yuan volatility after Brexit vote may create overseas investment window, Xinhua News Agency said in commentary yday
  • Yen advances following 0.7% loss yesterday
    • USD/JPY declines on disappointment BOJ/govt meeting didn’t yield announcements for specific measures, according to Shinkin Asset Management
    • BOJ Governor Kuroda says the central bank can add funds to market if necessary after meeting with govt in Tokyo
    • Standard Chartered Bank cuts its USD/JPY forecast to 105 by end of 3Q from 125 as Brexit spurs risk aversion
    • RBC also cuts USD/JPY forecasts for year-end and end-2017 to 97 from previous 101 and 115 on expectations of no rate increase by the Fed until middle of next year
    • Japanese executives expected yen to outperform peers this year before U.K.’s decision to quit the EU, according to survey of over 100 traders, strategists and corporate treasurers polled at a Bloomberg seminar in Tokyo on June 14
  • New Zealand dollar climbs for second day
    • Finance Minister English says RBNZ could cut rates if needed in Brexit aftermath
  • Indonesia’s rupiah rises for third day; Malaysia’s ringgit, Thailand baht, Singapore dollar and Taiwan dollar are also headed for second day gains
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Toru Nishihama (Dai-ichi Life Research Institute Inc)

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