Ebene Magazine – US Dollar Outlook: USD/SGD, USD/THB, USD/PHP, USD/IDR May Fall on Dovish Fed Speak en


We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

The haven-oriented US Dollar largely underperformed its ASEAN counterparts this past week. The Singapore Dollar, Indonesian Rupiah and Philippine Peso strengthened. Gains were also observed in the Indian Rupee amid a glut of Greenback in the banking system amid a tax dispute. Market sentiment notably improved, with the MSCI Emerging Markets Index rising by 1.32%.

Currencies from developing markets can be quite sensitive to risk appetite and capital flows. That is likely why a notable standout was the Thai Baht, which was little changed. According to Bloomberg, global investors sold a net $335.7 million of local equities on May 5th. That was the most since August 2019. On that day, the Bank of Thailand left benchmark lending rates unchanged and painted a soft outlook for growth ahead.

Last week’s disappointing US non-farm payrolls report missed expectations by a record margin. While the nation added almost 270k positions, economists were looking for a 1 million increase. This further pushed back 2022 Fed rate hike bets, offering global stock markets noticeable upside momentum right into the weekend. This also reflected poorly in the US Dollar, which swiftly depreciated.

With that in mind, there is going to be a plethora of Fed speak in the coming week. Speeches from branch presidents across the nation are due. Vice Chair Richard Clarida and Board of Governor member Lael Brainard will also present. Policymakers could use the soft jobs report to underscore the central bank’s still-dovish stance and downplay rising near-term inflation expectations as transitory.

This may continue cooling rate hike bets, which may bode well for Emerging Market sentiment. That would likely continue pressuring USD/SGD, USD/THB, USD/PHP, USD/IDR and USD/INR lower. US retail sales and CPI data are also on tap. Having said that, dovish commentary from the Fed could undermine the impact of a higher-than-anticipated inflation print.

Focus on the ASEAN economic docket, USD/PHP will be awaiting the Philippine Central Bank interest rate decision on Thursday. Bangko Sentral ng Pilipinas is expected to leave the overnight borrowing rate unchanged at 2.00% and likely maintain its dovish stance. This is despite recent CPI data continuing to clock in above the 2 – 4% target. The Philippine Central Bank may look past recent supply-driven gains in CPI.

First-quarter Philippine GDP is due on Tuesday. Growth is expected to rise 0.8% q/q versus 5.6% prior. The year-over-year outcome is expected at -3.2%, better than the previous -8.3% result. Still, these figures remain far off from where the nation was prior to the coronavirus, bolstering the case for a still-dovish central bank. Indian CPI and industrial production are due on Wednesday.

USD/INR could be open to a turn higher given recent dovish action from the RBI amid the surge in local coronavirus cases. A softer-than-expected inflation print could also keep the central bank open to further easing. Chinese CPI data will also be on tap this week. The nation is a key trading partner for ASEAN countries. Given episodes of liquidity drain from the PBOC, a higher inflation print code risk damaging Emerging Market sentiment.

On May 7th, the 20-day rolling correlation coefficient between my ASEAN-based US Dollar index and the MSCI Emerging Markets index changed to -0.81 from -0.70 one week ago. Values closer to -1 indicate an increasingly inverse relationship, though it is important to recognize that correlation does not imply causation.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors. We advise you to carefully consider whether trading is appropriate for you based on your personal circumstances. Forex trading involves risk. Losses can exceed deposits. We recommend that you seek independent advice and ensure you fully understand the risks involved before trading.
FX Publications Inc (dba DailyFX) is registered with the Commodities Futures Trading Commission as a Guaranteed Introducing Broker and is a member of the National Futures Association (ID# 0517400). Registered Address: 32 Old Slip, Suite 803; New York, NY 10005. FX Publications Inc is a subsidiary of IG US Holdings, Inc (a company registered in Delaware under number 4456365)

For more info on how we might use your data, see our privacy notice and access policy and privacy website.

Related title:
US dollar dips after payrolls shock, focus turns to inflation
Dollar Back to Where It Began the Year as Rally Burns Out
US Dollar Outlook: USD/SGD, USD/THB, USD/PHP, USD/IDR May Fall on Dovish Fed Speak
Dollar Licks Wounds After Payrolls Shock, Focus Turns to Inflation
FOREX-Dollar licks wounds after payrolls shock, focus turns to inflation
Dollar Up as US Employment Data Disappoints, Focus Turns to Inflation
Roger J Kerr says there are a number of handbrakes adversely impacting on the NZ economy
The Stock Market: Ho-Hum, More New Historical Highs
Week Ahead: Stocks To Continue Climbing On Ongoing Easing; USD At Crossroads
Non-Farm Payrolls Disappoints


Ref: https://www.dailyfx.com




Laisser un commentaire, votre avis compte!

[gs-fb-comments] [comment-form]

Laisser un commentaire, votre avis compte!