Halister News

(Bloomberg) -- Onshore yuan is the only major Asian currency to advance today, with the rest slipping as more Fed presidents talk about an interest-rate increase.

• CNY rises after WSJ reports that PBOC has dropped a market- based mechanism to determine its exchange rate, valuing stability as the primary priority
• Ringgit & won lead decline in Asia as dollar index rises after San Francisco Fed President Williams says two to three rate increases still “about right.”
  • Dollar may seesaw in coming weeks as markets look for clearer direction ahead of FOMC meeting in June, says Andy Ji, FX strategist at CBA
• CNY rises as much as 0.1%, with PBOC strengthening its daily reference rate by 51 pips higher than yesterday’s close
  • Exchange rate now back under government control, with PBOC guiding daily direction by alternating between setting value against USD and basket of currencies, WSJ says, citing people close to central bank
  • Debate btw Commerce Ministry as exporters want weaker yuan vs State-Owned Assets Supervision & Administration Commission which was concerned about USD-debt exposure of companies: WSJ
  • PBOC “seems to be allowing yuan to weaken gradually” ahead of June FOMC meeting to release depreciation pressure, says Wang Ju, senior FX strategist at HSBC
• Yen falls; Finance Minister Aso says 5-yen move in either direction over 2 days would be considered one-way and lopsided
  • USD/JPY will probably continue to have a short-term upward bias approaching BOJ’s June meeting, though decision will be dependent on data, politics and market conditions, Shusuke Yamada, FX/Equity strategist at BofAML writes in note today
  • Sales tax hike delay & fiscal stimulus could be announced in coming days and support risk sentiment
• Aussie gains ahead of RBA Steven’s speech
  • ANZ Wellington sees room for a dovish surprise when Gov. Stevens speaks, given market positioning, according to note today; odds of a follow-up cut in June or July are all but ruled out, and market views Stevens as reluctant to cut
  • AUD/NZD buying by Asia-based macro accounts is pressuring kiwi, according to an FX trader
• Ringgit drops to fresh two-month low amid retreat in crude oil
  • 1MDB held first update call for USD-denominated bondholders, reiterated commitment to work with IPIC
  • BNM kept OPR unchanged at 3.25% as expected on May 19, but there was also a tell-tale lack of dovish tilt, OCBC wrote in note on May 23
• Indonesian rupiah drops
  • Tax amnesty could strengthen exchange rate by 150 rupiah, BI Governor Martowardojo said yday; expects 53.4t rupiah ($3.9b) revenue following amnesty on assets held abroad
  • Indonesia to have investor meetings for euro bond roadshow from May 26, person familiar with the matter says