Forex - Asia Midday Highlights

 05:03 (GMT) 13 Oct

  [Forex Highlights]

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Asia Midday Highlights (OQIB3901)

13 October 2011

Asia Mid-Day Highlights

Radhika Rao, Connie Tse, Fiona Lim, Chester Liaw, Bernard Aw


- China: Export momentum continued to show signs of easing, mellowing to 17.1% y/y by Sep (vs 24.5% y/y in Aug), while imports slowed to 20.9% y/y (vs 30.2% y/y in Aug), leaving a trade surplus of USD 14.5bn.

- China: China announced emergency plans to support cash-strapped SMEs amid tighter credit conditions; which include tax breaks and easier access to bank loa ns.

- South Korea: BOK left policy rate unchanged at 3.25% for the fourth consecutive month.

- Hong Kong: John Greenwood, the architect of the city?s currency board system said that the cost of inflation associated with the peg to USD is less than the cost of jeopardizing capital market activities should HKMA decides to de-peg. - BBG

- Taiwan: HKSAR Chief Executive Tsang said yesterday that Hong Kong is actively developing closer economic ties with Taiwan (BBG).

- Taiwan: President Ma unveiled on Wed a large-scale infrastructure plan to increase Taiwan's competitiveness; which plans to upgrade roads, railways, water treatment systems and broadband internet connection (Taiwan News).

- Malaysia: Tenaga Nasional Bhd (TNB), the national utility company, is facing gas shortages as President and CEO Che Khalid said the company may have no choice but to use alternative fuel, which costs five times more if the gas shortage is unresolved (Borneo Post).

- Malaysia: Recent floods in Thailand have forced Malaysian companies with Thai-based operations to shut down temporarily their facilities.

- Thailand: Commerce Min Kittirat cautioned that the damage from current floods could be higher than previous estimates of 0.6-0.9% of GDP, adding that the situation needs to ease for a more accurate assessment.

- Thailand: September Thai consumer confidence eased to 72.2 close to our estimates and softening from August's 73.8

- Philippines: July FDI inflows thinned to USD 26mn - nine month lows and took Jan-Jul inflows to USD 805mn down 10% y/y.

- India: RBI Dep Gov Gokarn comments that outflows were weighing on INR, though stressed that controlling inflation was still the main agenda for the central bank.


- EU: Berlin wants to persuade other members of the European Union to draft changes to the bloc's founding treaties at a new 27-nation convention that would take place in 2012. - FT

- EU: Leading European banks say they would rather sell assets than raise expensive new capital to meet compulsory EU demands for higher capital ratios - FT

- Japan: BoJ Sept minutes: a few board members said further easing may become necessary in fuure as the economy faces increasing risks including Europe debt crisis.

- Australia: Aussie Sept employment +20,400, vs 10,000 expectation, Unemployment at 5.2%, down from 5.3 %

- UK: A downgrade of Britain's top notch credit rating is potentially unavoidable because the country can not grow out of its debts, a leading asset manager has claimed. - Telegraph


USD/Majors: Early morning saw better than expected AUD jobs data, which saw the major spike up to 1.0230 from 1.0140-50. Prices came off soon after, though the 1.0150-60 level proved to be adequate support. NZD mirrored AUD movements initially but quickly met into heavy offers, which drove it to prices before the jobs data, with AUDNZD rising to above 1.2850. Thereafter, slightly worse than expected China trade numbers saw AUD fall 20 pips from 1.0885-90, with EUR falling 15-20 pips from 1.3775-80 as well.

JPY Crosses: Calmer markets lifted most of JPY crosses except for USD/JPY, which slipped towards the 77.00 figure on rumours of large Japanese exporters' and banks' offers. EUR/JPY edged up from morning lows towards 106.50 while GBP/JPY headed towards 121.50. Likewise, AUD/JPY bounced atop of 78.50 helped by stronger job figures released earlier.

USD/Asians: Regional currencies witnessed a one-sided bias during morning trades. KRW outperformed the rest at 0.9% gains against the dollar, followed by SGD at 0.4%. Equity-wise, bourses were mostly bullish with HSI and JKSE at >1%. SETI deviated from the rest with moderate losses as concern over ongoing flood damages weighed on sentiments. All quiet on the data front for the afternoon session.


Oil prices slipped overnight, decline aided by softer China data. Crude oil last traded at $ 85.16/bbl.

Gold prices were relatively unchanged as underlying uncertainty beckoned demand for the safe-haven. Spot gold trading at $1678.09-1678.90/oz at last indication.


USD/CNY: USD/CNY mid-point was up by 0.2%, the biggest gain since November last year; followed by a 4-big figure jump in the spot to 6.3900 before easing to the 6.3800-mark soon after. Similarly, 1Y NDF spiked past 6.4000 at one point.

USD/KRW: Gapped down to 1158.0 at open and hovered mostly below 1160 as strong gains in Kospi weighed on the pai r.

USD/HKD: Range-bound trades within 7.7780-7.7810 were sustained throughout the morning before pair edged under 7.7790 at last check, bogged down by higher stocks.

USD/TWD: Pair broke multiple support after open, first at 30.365 then at 30.28740. Moderate gains in Taiex kept pair under 30.350 well into lunch.


USD/SGD: Moves were subdued relative to previous sessions as it waffled within 1.2700-1.2800. Positive equities and strong EUR denied the pair of much upsides.

USD/MYR: Bounced to intra-day highs of 3.1420 after a weaker start but higher stocks in KLCI pulled the pari under 3.1400.

USD/IDR: >1% gains in JKSE kept the lid on the pair under 8960 during morning trades.

USD/THB: Trades kept close to the 30.80-handle, weighed by mild gains in SETI.

USD/PHP: Gapped down under 43.200 but quickly reversed losses on higher USD/CNY fixing. Pair has since came off highs to ease under sub-43.3-ish levels, weighed by positive equities.

USD/INR: Declined towards 48.900 as moderate gains in SENSEX weighed.

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