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.

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
Bearish
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
Gold
Bearish
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
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • The US Dollar could gain as it forms bullish technical formations against the Singapore Dollar and Malaysian Ringgit. USD/PHP may have bottomed, will USD/IDR rise next? Find out from @ddubrovskyFX here:https://t.co/3UIKmbLIvD https://t.co/PY2YyH4vkQ
  • The Indian Rupee may be at risk to the US Dollar as USD/INR attempts to refocus to the upside. This is as the Nifty 50, India’s benchmark stock index, could fall further. Get your $USDINR market update from @ddubrovskyFX here:https://t.co/3wsYlSxd26 https://t.co/z2qB9p8IgX
  • A proxy of #EmergingMarket capital flows hit its lowest since July, falling with the #SP500 after some divergence This is as #USD gained against its developing FX counterparts, highlighting potential risk of a spillover outwards Stay tuned for next week's #ASEAN fundy outlook! https://t.co/kAvpnb0EXO
  • 4 consecutive down weeks for the #SP500, last matched over a year ago #Fed balance sheet continues to gain very cautiously, now at its highest since the middle of June. Still, at slower pace than last week Focus shifts to US fiscal stimulus next week in the House of Reps https://t.co/f8zpSILm86
  • #Gold prices have broken lower and while the broader technical structure is constructive, the risk remains for a deeper correction before resumption. Get your $XAUUSD technical analysis from @MBForex here: https://t.co/7p3jPx6nQd https://t.co/nnCSdt6OV5
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.00% 🇳🇿NZD: -0.02% 🇯🇵JPY: -0.15% 🇨🇭CHF: -0.23% 🇦🇺AUD: -0.25% 🇪🇺EUR: -0.33% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/O8Qb7OHZza
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: -0.30% Gold: -0.33% Silver: -0.92% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/lEALo4Z1M9
  • The S&P 500 breakdown is testing the first major zone of support and we’re looking for a reaction. Get your S&P500 technical analysis from @MBForex here:https://t.co/JrTNmQ5c7g https://t.co/D79T1134P9
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.29%, while traders in EUR/GBP are at opposite extremes with 65.04%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/lzTHuIgzFQ
  • US Equities Update (Friday Close): $DJI +1.34% $SPX +1.60% $NDX +2.34% $RUT +1.59% $VIX -7.93%
US Dollar Fundamental Outlook: USD/SGD, USD/IDR, USD/MYR, USD/PHP

US Dollar Fundamental Outlook: USD/SGD, USD/IDR, USD/MYR, USD/PHP

2020-08-04 03:00:00
Daniel Dubrovsky, Analyst
Share:

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

  • US Dollar drop continued against ASEAN currencies
  • ASEAN external risk: US fiscal stimulus and jobs data
  • ASEAN and South Asia risk: GDP, RBI rate decision

US Dollar ASEAN Weekly Recap

The haven-linked US Dollar extended losses against its ASEAN counterparts last week, with the Singapore Dollar, Malaysian Ringgit and Philippine Peso seeing some of the best performance. The Indonesian Rupiah and the Indian Rupee were little-changed – see chart below.

USD Forecast
USD Forecast
Recommended by Daniel Dubrovsky
What is the road ahead for USD in Q3?
Get My Guide

Market sentiment spent most of the past five trading sessions broadly improving, and this is what ASEAN FX paid most attention to – as expected. All eyes were on the Federal Reserve as the central bank left interest rates at near-zero levels while Chair Jerome Powell hinted for the need in a prolongment of accommodative policy measures. The Fed highlighted that this is due to the considerable risks the coronavirus poses.

All eyes were also on key tech earnings last week as Facebook, Amazon, Apple and Google smashed expectations, pushing the Nasdaq 100 higher. In Malaysia, the nation reported a larger-than-expected trade surplus. The markets have also been shrugging off rising US-China tensions. Ebbing stock market volatility and accommodative central bank policy around the world have been depressing the US Dollar.

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

Last Week’s US Dollar Performance

Last week's US Dollar performance

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

External Event Risk – US Fiscal Stimulus, Non-Farm Payrolls Report, Lockdowns?

External event risk for ASEAN currencies somewhat fades this week, but USD/SGD, USD/IDR, USD/MYR and USD/PHP will likely remain sensitive to market mood. The US Congress ended last week without an agreement on the next fiscal package as the $600 extra unemployment benefit per week expired. While hopes remain high for a deal, a delay would risk sparking a selloff in stocks that boosts USD.

Markets continue to shrug off the surge in US coronavirus cases and what has recently been a spike in fatalities as well. It may be because the measures taken thus far to contain the spread are being seen as insufficiently disruptive to materially throw off the outlook for future GDP. Harsher lockdowns remain an upside risk for the US Dollar in the event that such steps stoke demand for preserving capital and liquidity.

All eyes at the end of the week turn to the US jobs report for further information about the health of the labor market. Data still tends to outperform relative to economists’ expectations. A rosy jobs report, combined with an ultra-loose Fed, may boost equities further. That may propel the SGD, MYR, IDR and PHP higher towards the end of the week.

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

ASEAN, South Asia Event Risk – Indonesia and Philippine GDP, Reserve Bank of India Also Due

The economic calendar is fairly busy as more will be revealed about the damage Covid-19 has done. On Wednesday, Indonesian GDP may contract about -5% y/y in the second quarter, a historic amount. Then on Thursday Philippine GDP could shrink about -9% over the same period. Aside from a material miss relative to expectations, IDR and PHP may look past these as markets are forward-looking.

Investors may already be pricing in these outcomes and looking forward to the anticipated economic recovery ahead. More timely releases include Philippine trade data as well as Singapore retail sales. China, a key trading partner for the ASEAN group, will release Caixin composite PMI data on Wednesday followed by the latest trade balance figures on Friday.

In another part of the Asia Pacific region, the Reserve Bank of India will have its interest rate decision on Thursday. It may reduce its benchmark repo rate to 3.75% from 4.00%. However, expectations for a 25-basis point cut are fairly split. This is a key ingredient for potential volatility in the Indian Rupee depending on what side investors find themselves. Follow me on Twitter for updates in USD/INR.

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, excluding China, (EMXC) stood at -0.89. 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 (Ex China) – Daily Chart

US Dollar Fundamental Outlook: USD/SGD, USD/IDR, USD/MYR, USD/PHP

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