- US Dollar gained versus SGD, THB despite ‘risk-on’ trade
- Rising US inflation expectations could be aiding the Greenback
- Philippine Central Bank &, INR looks to Indian CPI
WEEKLY RECAP
The safe haven US Dollar gained versus ASEAN currencies last week despite a recovery in risk appetite. Market volatility eased as “short squeezes” slowed and the markets calmed.
The Indonesian Rupiah and Philippine Peso were particularly in focus. Intervention by the Bank of Indonesia could keep USD/IDR under pressure as it ensures a steady exchange rate. Additional USD gains may be met with stronger measures from the Indonesian central bank. Meanwhile the Indian Rupee gained as the RBI left benchmark lending rates unchanged.
TREASURY YIELDS, FISCAL STIMULUS, US CPI AND SENTIMENT
Rising longer-dated Treasury yields have boosted the USD. The 30 rate closed at its highest since February 20th and the 10-year followed suit reflecting rising economic recovery bets pushing up inflation expectations. US fiscal stimulus expectations are boosting recovery expectations and as covid cases decline.
PHILIPPINE CENTRAL BANK, INDIAN CPI AND INDUSTRIAL PRODUCTION
The Philippine Central Bank (BSP) is likely to attract attention. The BSP is expected to leave its overnight borrowing rate at 2.00%. As such, USD/PHP may be glued to external fundamental developments. USD/INR will watch Indian industrial production and CPI figures on Friday.
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