Asian currencies perk up as the dollar rally loses steam
Reuters|
Updated: Oct 04, 2017, 12.41 PM IST
Asian currencies firmed on Wednesday, with the Thai baht headed for its best day in nearly ten weeks, as the dollar's rally lost steam following speculation that when Fed Chair Janet Yellen retires in February her successor might be the less hawkish of two leading candidates.
The dollar, which had rallied earlier this week, eased slightly after the Politico website reported that US Treasury Secretary Steven Mnuchin favours Fed governor Jerome Powell, over former governor Kevin Warsh, who was perceived to hold a more hawkish stance.
Meanwhile, the World Bank raised its 2017, 2018 growth forecast for East Asia and projected an upward economic growth forecast for Malaysia stating it was lifted by higher investment and a recovery in global trade. The Malaysian ringgit nudged up and was on track for its best day in nearly three weeks.
In other currencies, the Thai baht appreciated 0.3 per cent, and was set for its best day since July 27. Thailand's strong recovery in exports and tourism prompted an upbeat outlook for the economy by the World Bank.
The Philippine peso inched up 0.3 per cent. The country's central bank governor proclaimed that the tax reforms planned by the government will only have a modest impact on inflation and will not require any changes to monetary policy.
The Indonesian rupiah also recorded marginal gains after the finance ministry's financing and risk management office said it raised 17.85 trillion rupiah worth of bonds, above an indicative target of 15 trillion rupiah.
Taiwan, China and South Korea markets were closed for a holiday.
INDIAN RUPEE
The Indian rupee rose slightly ahead of a policy meeting later in the day.
The Reserve Bank of India is expected to keep its policy rate unchanged despite a sharp slowdown in economic growth, after inflation surged to a five-month high, threatening the central bank's target.
"Not surprisingly, the committee is under pressure to ease rates in midst of slowing growth and wide cushion of real rates with inflation at sub-4 per cent, while the repo rate is at 6 per cent," DBS said in a note.
"The RBI's interpretation of the growth slowdown will also garner interest. We expect benchmark rates to be held unchanged for the rest of the year, whilst looking for today's policy commentary for guidance."
The dollar, which had rallied earlier this week, eased slightly after the Politico website reported that US Treasury Secretary Steven Mnuchin favours Fed governor Jerome Powell, over former governor Kevin Warsh, who was perceived to hold a more hawkish stance.
Meanwhile, the World Bank raised its 2017, 2018 growth forecast for East Asia and projected an upward economic growth forecast for Malaysia stating it was lifted by higher investment and a recovery in global trade. The Malaysian ringgit nudged up and was on track for its best day in nearly three weeks.
In other currencies, the Thai baht appreciated 0.3 per cent, and was set for its best day since July 27. Thailand's strong recovery in exports and tourism prompted an upbeat outlook for the economy by the World Bank.
The Philippine peso inched up 0.3 per cent. The country's central bank governor proclaimed that the tax reforms planned by the government will only have a modest impact on inflation and will not require any changes to monetary policy.
The Indonesian rupiah also recorded marginal gains after the finance ministry's financing and risk management office said it raised 17.85 trillion rupiah worth of bonds, above an indicative target of 15 trillion rupiah.
Taiwan, China and South Korea markets were closed for a holiday.
INDIAN RUPEE
The Indian rupee rose slightly ahead of a policy meeting later in the day.
The Reserve Bank of India is expected to keep its policy rate unchanged despite a sharp slowdown in economic growth, after inflation surged to a five-month high, threatening the central bank's target.
"Not surprisingly, the committee is under pressure to ease rates in midst of slowing growth and wide cushion of real rates with inflation at sub-4 per cent, while the repo rate is at 6 per cent," DBS said in a note.
"The RBI's interpretation of the growth slowdown will also garner interest. We expect benchmark rates to be held unchanged for the rest of the year, whilst looking for today's policy commentary for guidance."
