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US Dollar Forecast: SGD, IDR, MYR, PHP Eye Earnings Season, China GDP

US Dollar Forecast: SGD, IDR, MYR, PHP Eye Earnings Season, China GDP

Daniel Dubrovsky, Contributing Senior Strategist


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

  • US Dollar sank versus ASEAN FX as sentiment continued improving last week
  • All eyes are on US earnings and retail sales. China GDP, Bank of Indonesia up
  • What else is in store for USD/SGD, USD/IDR, USD/MYR and USD/PHP ahead?

US Dollar ASEAN Weekly Recap

Last week’s US Dollar rout continued against ASEAN FX as it depreciated against the Singapore Dollar, Indonesian Rupiah, Malaysian Ringgit and Philippine Peso. Market sentiment continued to broadly improve which helped to slow overall capital outflows from emerging market economies. To learn more about the importance of this fundamental theme, check out last week’s ASEAN fundamental outlook.

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Investors’ cheery mood could be attributed to a combination of hope for further US fiscal stimulus as well as slowing coronavirus case growth around parts of the world. Once again, the markets brushed aside the ongoing onslaught of dismal economic data. An unprecedented 17 million people have applied for jobless claims in the United States since the middle of last month as local consumer sentiment dwindled.

One of the best-performing ASEAN currencies was the Indonesian Rupiah. This could have been attributed to the Federal Reserve opening up a US$60 billion repo facility with the country to help ease a USD shortage. ASEAN central banks have been stepping up efforts to stem devaluations in their currencies. Foreign exchange reserves are being spent and may continue being unwound. Investors are looking on with greater scrutiny.

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/IDR

USD/SGD, USD/PHP, USD/IDR, USD/PHP Event Risk This Week - US

External event risk will arguably remain the key driver for pairs such as USD/SGD, USD/IDR, USD/MYR and USD/PHP. All eyes continue to remain on the US to gauge the impact of the coronavirus on global economic growth. In this sense, first-quarter earnings season begins this week with major banks reporting. The sudden outbreak of the virus means companies have to drastically revise their outlooks.

Earnings per share are widely anticipated to decline but the extent of which this happens could largely vary between companies. Uncertainty remains regarding the pace of the expected recovery. This would largely depend on how fast the country could return to ‘business as usual’. US President Donald Trump has hinted that the nation may be heading for a sooner-than-anticipated open and that he has total authority over easing restrictions.

This is as local state governors – such as California’s Gavin Newsom and New York’s Andrew Cuomo –hinted at forming a regional alliance to help manage reopening operations. Uncertainties about the future of how the nation as a whole manages this maneuver could offer some downside pressure for equities. This is as businesses await further guidance on these measures as their outlooks may hinge on this key detail.

What will likely continue growing in the background is disappointing economic data. Local retail sales for March are due this week as well as jobless claims. The longer the nation stays in lockdown, the greater the stress the country faces. Doubts over the pace of reopening will open the door to investors accepting the reality of a harsher recession. In the background, aggressive monetary and fiscal stimulus efforts continue brewing.

China GDP, Industrial Production and Retail Sales

Meanwhile in the world’s second largest economy, data has been tending to disappoint at increasingly smaller margins. On the next chart below, the MSCI Emerging Markets Index has bounced since last month’s bottom. During this time – especially as China lifted lockdown measures – the Citi Economic Surprise Index tracking China also bounced. On Tuesday, local trade data printed better than expected.

Check out the DFX economic calendar to stay updated on retail sales, jobless claims and more!

That may open the door to a similar rosy outcome when China releases first-quarter GDP on Friday. Growth is expected to contract a historical -6.0% y/y and -12.0% q/q. Other measures of data such as industrial production and retail sales will also cross the wires simultaneously. Slightly ‘less-bad’ outcomes may offer a boost for ASEAN FX such as SGD and IDR against the Greenback.

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ASEAN Event Risk – Bank of Indonesia

The Bank of Indonesia may lower its 7-day reverse repo rate to 4.25% from 4.50% on Tuesday, but those odds are not fully baked in. So there is some room of surprise here for the Rupiah depending on the direction policymakers go. As mentioned earlier, the emergency credit line from the Fed is helping to alleviate local financial stress. That may deter further aggressive easing from the central bank.

-- Written by Daniel Dubrovsky, Currency Analyst for

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.