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Asia Forex Market Report - 30 September 2014


The PHP hit a five-month low last week Thursday, leading losses in emerging Asian currencies, as the dollar touched a four-year high against major currencies. The peso lost as much as 0.7% to P44.79 per dollar, its weakest since April 25. The country's July electronics imports reported the steepest drop in more than two years, indicating an economic slowdown. The peso closed at P44.77 against the US dollar.


Despite a series of hawkish data, the Thai central bank left the policy rate unchanged at 2% at the review on 25 September, pushing the baht back near a one-month low against the dollar. The Thai baht has been on a weakening trend since mid-August and had hit a one-month low of 32.31 on 26 September before bouncing back a bit yesterday, helped by the dollar weakness. A section of the market was expecting the Bank of Thailand to sound a bit hawkish this time as the data points after the last decision were largely on the positive side.


The Malaysian ringgit fell to a new four-month low last week Tuesday bucking the trend of its regional peers and opening weaker levels on the chart. The ringgit has dropped more than 3% since reversing the direction from a 10-month peak last month. This ringgit fall stood apart as Indian rupee, Thai baht, Chinese yuan and Indonesian rupiah had all shown strength against the greenback, which has seen some profit booking near the multi-month high it had touched recently. The July-August rally was aided by the central bank rate hike in July, but at this month's review the main rate was held steady at 3.25%. Policymakers see domestic demand in Malaysia, the key driver for its economic growth, growing only modestly in the coming quarters.


The Indonesian rupiah exchange rate depreciated sharply on Monday (29/09) due to the market’s reaction against parliament’s passing of a bill that ends direct elections in the regions. On Friday (26/09), parliament agreed that mayors, district heads and governors will be elected by local legislatures instead of the people. Critics say this bill is a major setback for democracy and makes the system more vulnerable to corruption. Last Friday, investors had already pulled USD $119 million from Indonesian shares. The Indonesian rupiah exchange rate had depreciated 0.87 percent to IDR 12,152 per US dollar.


The South Korean won fell nearly 1% yesterday to its lowest close since April 7, as the dollar resumed its broad rally on robust US data and reached a four-year high against a basket of major currencies. The WON was quoted at 1,053.8 to the dollar at the conclusion of onshore trade compared to Friday's close of 1,044.4, breaching a key psychological resistance level of 1,050. South Korean shares edged lower yesterday, as a tepid industrial profit report over the weekend continued a string of lacklustre data from China, South Korea's largest export destination.


30 September 2014 01h30 am UTC Japanese Unemployment Rate Announcement
30 September 2014 03h45 am UTC Chinese HSBC Manufacturing PMI Final
30 September 2014 07h30 am UTC Thai Industrial Production and Current Account Data

01 October 2014 02h00 am UTC South Korean Inflation Rate and Balance of Trade Data
01 October 2014 05h00 am UTC Indonesian Inflation Rate Data
01 October 2014 08h30 am UTC Thai Inflation Rate Data
02 October 2014 06h00 am UTC Thai Consumer Confidence Data
03 October 2014 03h00 am UTC Chinese Non-Manufacturing PMI


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