The Dollar Continues to Struggle: USDSGD, USDIDR, USDMYR, USDPHP

The Dollar Continues to Struggle: USDSGD, USDIDR, USDMYR, USDPHP

USD, SINGAPORE DOLLAR, INDONESIAN RUIPAH, MALAYSIAN RINGGIT, PHILIPPINE PESO – MAIN NEWS

  • The dollar traded mixed in stimulus limbo vs. the currencies of the countries belonging to the Association of Southeast Asian Nations
  • USDSGD, USDIDR, USDMYR, USDPHP looking for outside factors
  • Main happening risk: USA gross domestic product, season of income, Brexit negotiations, coronavirus cases on the rise

USD ASEAN OVERVIEW FOR THE WEEK

The haven-linked dollar traded slightly changed this last week vs. the other ASEAN currencies. The Peso and Rupiah outperformed while the Singapore national currency and Malaysia’s one were more controlled. USDPHP and USDSGD pairs react more sensitively to outside factors like news flow fueling the marketplace environment. In this area, the USA fiscal aid package topic changes are keeping investors on the verge.

Maybe one of the reasons why the Peso performed better was the lessening of lockdowns in the Philippines’ main city. The governor of their CB, Benjamin Diokno, stated recently that Q3 gross domestic product would probably outperform Q2. The unexpected third-quarter gross domestic product of China also probably kept the risk-controlled in the Asian Pacific area.

USD PERFORMANCE IN THE PREVIOUS WEEK

*ASEAN-Based USD Index averages USDSGD, USDIDR, USDMYR and USDPHP

OUTSIDE FACTOR RISK: US FISCAL AID, GROSS DOMESTIC PRODUCT, BREXIT EVENTS, CLIMBING COVID NUMBERS

The next week will be quite packed outside the countries belonging to the Association of Southeast Asian Nations and the Asia-Pacific region. So this could jumpstart events on a worldwide scale risk-wise. DC politicians continue to confuse citizens with their fiscal stimulus plans. Nancy Pelosi, Speaker of the House, stated that aid could be put through before the elections if the President allows it. However, there are rising conflicts in the Senate.

Steven Mnuchin, Treasury Secretary, highlighted that there are still key differences. White House Economic Adviser Larry Kudlow said that the conversation wasn’t really going anywhere for now. If they don’t select a plan before the election, stock markets will stay shaky until selecting a new government. Brexit’s situation seems to be advancing at a slow pace, reducing the equation’s unknown factor.

The USA’s GDP for Q3 will be done on Thursday and will see a 31.8% rebound quarter-to-quarter following a significant shrinkage in Q2 (-31.4%). But, lots of that could have already been priced in by marketplaces. Citi Economic Surprise Index monitoring the USA went downhill, to some of the lowest points since mid-June at 127.90. This is a fall from a record 270.80 at the start of July.

So, since the summer, the USA’s information is lacking in surprise and causing restlessness. The third-quarter earnings season carries on, with big company names like Facebook, Apple, and Google reporting numbers. For now, the profits seem to paint an optimistic picture. More positive results could assist in keeping the risk appetite untouched. On the other hand, coronavirus numbers keep on rising worldwide, probably leading to new lockdowns.

ASEAN, SOUTH ASIA HAPPENING RISK – SINGAPORE INDUSTRIAL MANUFACTURING, MALAYSIAN TRADE INFO

The economic docket of ASEAN is pretty light. Industrial manufacturing in Singapore will announce on Monday new info. This can contribute to a better look at worldwide growth. This is due to Singapore depending a lot on the outside sector. Then, on Wednesday, we will wait for Malaysia’s trade info. Due to the abundance of outside risks, USDSGD, USDMYR, USDIDR, and USDPHP could focus more on the marketplace sentiment.

On 23 October, the twenty-day rolling correlation number between my ASEAN USD index and the previous week’s Morgan Stanley Capital International Emerging Markets Index stayed the same at -0.90. Worth nearer to -1 shows a more inverse relationship. But it’s paramount to bear in mind that correlation doesn’t necessarily tell us the cause.

ASEAN-BASED US DOLLAR INDEX VS. MSCI EMERGING MARKETS INDEX – DAILY GRAPH

*ASEAN-founded USD Index averages USDSGD, USDIDR, USDMYR and USDPHP