0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Mixed
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
GBP/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Take a closer look visually at the most influential global importers and exporters here: https://t.co/1G7CRsegRX https://t.co/U5nV4ch2t8
  • A currency carry trade involves borrowing a low-yielding currency in order to buy a higher yielding currency in an attempt to profit from the interest rate differential. Find out if the carry trade suits your trading style here:https://t.co/sR7HqpK8BI https://t.co/Q6WGzHhudp
  • Implementing a trading checklist is a vital part of the trading process because it helps traders to stay disciplined, stick to the trading plan, and builds confidence. Learn how to stick to the plan, stay disciplined, and use a checklist here: https://t.co/2MCG036HGH https://t.co/CbnRsuyRwi
  • #Gold saw its worst performance the past 5 days in 5 months as longer-dated government bond yields in developed countries rose Could this be the beginning of a turning point in #XAUUSD? https://www.dailyfx.com/forex/fundamental/forecast/weekly/chf/2020/08/15/Gold-Price-Outlook-Will-XAUUSD-Brush-off-Worst-Week-in-5-Months.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/x2Indk3b7P
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out: https://t.co/td5WA4hCZC https://t.co/PT09ZsIOCa
  • The US #Dollar may rise, buoyed by haven demand as fiscal stimulus talks stagnate and swelling tensions between Washington and Beijing sink trade talks. Get your #currencies update from @DanielGMoss here: https://t.co/Wcw9PDUr67 https://t.co/gnYZYl6aLV
  • Upside in #CrudeOil struggling ahead of #OPEC meeting. Cartel likely to maintain wait and see approach. Get your #commodities update from @JMcQueenFX here: https://t.co/gNHHKoTUzm https://t.co/eF40DRIBJ5
  • #Gold had some big moves last week, and while vol is expected to die down a bit, it will be important to see if gold can hold its ground in the coming days/weeks. Get your #metals update from @PaulRobinsonFX here: https://t.co/N8a84hRnHN https://t.co/3fjodPHTDm
  • The S&P 500's refusal to hit a record and Dollar's anchor to range this past week is sign of summer liquidity conditions, but the quiet is not insurmountable. 'S&P 500 Record and Dollar Break Look to Stimulus and Trade to Override Seasonality' https://www.dailyfx.com/forex/video/daily_news_report/2020/08/15/SP-500-Record-and-Dollar-Break-Look-to-Stimulus-and-Trade-to-Override-Seasonality-.html https://t.co/mbvPkdQfYl
  • Get your snapshot update of the of relative currency strength and exchange status from around the globe here: https://t.co/DmhBkcMZBK https://t.co/kFk6ccU3Sk
US Dollar May Fall as 2021 GDP Outlook Remains Intact: ASEAN Forecast

US Dollar May Fall as 2021 GDP Outlook Remains Intact: ASEAN Forecast

2020-07-07 05:00:00
Daniel Dubrovsky, Analyst
Share:

US Dollar, Singapore Dollar, Indonesian Rupiah, Philippine Peso, Malaysian Ringgit – Talking Points

  • US Dollar outlook versus ASEAN FX eyes rising virus cases
  • Indonesian Rupiah weakness was curbed by the central bank
  • 2021 US growth expectations have not been materially altered
  • Asia-Pacific data: Bank of Malaysia, Singapore General Election

US Dollar ASEAN Weekly Recap

The haven-oriented US Dollar experienced a rather neutral session this past week against ASEAN currencies – see chart below. It then sold off over the past 24 hours. During this time frame, global equities – such as the MSCI Emerging Markets Index (EEM) – accelerated higher. This is as China’s state-run Securities Journal cheerlead local stock markets, sending the mainland-based CSI 300 rallying in excess of 5 percent.

Top Trading Lessons
Top Trading Lessons
Recommended by Daniel Dubrovsky
How can you overcome common pitfalls in FX trading?
Get My Guide

A notable ASEAN standout was the Indonesian Rupiah, which weakened 2.31% last week. That was the worst performance in almost 4 months. USD/IDR rose ahead of yesterday’s local debt monetization hearing as concerns over the Bank of Indonesia’s (BI) role in coordinating with the government’s fiscal response unnerved traders. In fact, IDR selling pressure forced the BI to intervene – as expected.

The risks of the BI funding about $40 billion of government liability – which is the biggest debt monetization program among Emerging Market nations – include rising inflation expectations, concerns over central bank independence and credit rating downgrades. The latter has thus far been avoided after soothing commentary from S&P and Moody’s – two major ratings agencies.

On Monday, the Bank of Indonesia bought $27 billion in government debt at the benchmark 7-day reverse repo rate. This was instead of earlier plans for near-zero rates. Meanwhile, the Philippine Peso strengthened as traders continued to price out local rate cut bets. Philippine Central Bank Governor Benjamin Diokno also stressed that the country “must reopen the economy” as monetary policy remains data driven.

Discover your trading personality to help find optimal forms of analyzing financial markets

Last Week’s US Dollar Performance

US Dollar May Fall as 2021 GDP Outlook Remains Intact: ASEAN Forecast

*ASEAN-Based US Dollar Index averages USD/SGD, USD/IDR, USD/MYR and USD/PHP

External Event Risk – US GDP Bets, Coronavirus Cases and Initial Jobless Claims

As I have been stressing, the broader trajectory for the US Dollar against the Singapore Dollar, Indonesian Rupiah, Philippine Peso and Malaysian Ringgit from a fundamental standpoint remains dependent on risk trends. Rising coronavirus cases in the world's largest economy - the US - are likely to be the key driver ahead. This has now lead to certain states and counties either reversing or pausing lockdown-easing efforts.

Texas Governor Greg Abbott recently called for a halt to business reopenings as US confirmed virus cases continue increasing above weekly averages. Interestingly, this has not had a material impact on 2021 GDP estimates as the 2020 outlook remains dismal – see next chart below. The S&P 500 and EEM have been closely rising alongside rosy growth expectations, consequentially hurting the US Dollar.

It may be that investors don’t see recent measures taken to stem further outbreaks as severe enough to offset the economic outlook. Keep in mind that death rates have not followed recent gains in cases. A sharp rise in the former could risk unsettling financial markets. For the time being, attention turns to this week’s US jobless claims as a key driver for sentiment and the USD.

Introduction to Forex News Trading
Introduction to Forex News Trading
Recommended by Daniel Dubrovsky
What does it take to trade around data?
Get My Guide

Risk Trends Versus US GDP Expectations

US Dollar May Fall as 2021 GDP Outlook Remains Intact: ASEAN Forecast

ASEAN Event Risk – Bank of Malaysia, Singapore General Election

Turning the focus to ASEAN-specific event risk, later today is the Bank of Malaysia (BNM) rate decision. The BNM is expected to lower the overnight policy rate to 1.75% from 2.00% as it continues to support the economy amid the coronavirus. As such, a surprise hold can catch investors off-guard and boost the Malaysian Ringgit. Bringing the rate down to the expected level would also be the lowest point since at least 2004.

On Friday, the Singapore Dollar will be closely watching the local general election. The ruling People’s Action Party (PAP) looks likely to remain in power as it defends its management of Covid-19. New cases in the island city-state continue to clock in below weekly averages. A win for PAP would mean a 15th consecutive term since Singapore’s independence. Confirmation of the status quo will likely keep SGD volatility at bay,

Local GDP data may also be released this week, though the latest it could cross the wires is July 14. Philippine trade data and Indian industrial production will be released for PHP and INR to watch respectively. These will offer further insight into local economic recovery progress. For those looking for technical analysis, check out my latest USD/SGD, USD/IDR, USD/PHP and USD/MYR outlook.

At the end of last week, the 20-day rolling correlation coefficient between my ASEAN-based US Dollar index and the MSCI Emerging Markets Index (EEM) stood at -0.57. Values closer to -1 indicate an increasingly inverse relationship, though it is important to recognize that correlation does not imply causation.

Forex for Beginners
Forex for Beginners
Recommended by Daniel Dubrovsky
Learn how to become a more consistent forex trader
Get My Guide

ASEAN-Based USD Index Versus MSCI Emerging Markets Index – Daily Chart

US Dollar May Fall as 2021 GDP Outlook Remains Intact: ASEAN Forecast

Chart Created Using TradingView

*ASEAN-Based US Dollar Index averages USD/SGD, USD/IDR, USD/MYR and USD/PHP

-- Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

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

DISCLOSURES

News & Analysis at your fingertips.

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.