ASEAN Outlook Talking Points:
- MYR and SGD faced surprising CPI data, but their focus was on US developments
- Next, ASEAN bloc currencies will likely continue eyeing USD[1] & equities for moves
- Negative RSI divergence still persists in USD/PHP, warning of a potential reversal
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Last Week the Malaysian Ringgit fell, albeit slightly, when a 3-year low local CPI reading[3] crossed the wires. Keep in mind that Malaysia’s central bank (BNM) actually envisions negative headline inflation ahead, making the disappointing data not far off from what the BNM expects. Meanwhile, the Indonesian Rupiah slumped after its central bank left rates unchanged, though its depreciation was largely due to US Dollar[4] gains during the first half of the July 19th trading session.
This past Monday, the US Dollar managed to put in a partial recovery from Friday’s session where President Donald Trump fretted about Fed rate hikes. News over the weekend from US Treasury Secretary Steven Mnuchin that Mr. Trump supports the central bank’s independence[5] allowed for some greenback gains as local bond yields rallied. This thus put some pressure against other ASEAN block currencies like the Singapore Dollar.
Speaking of SGD, yesterday we had local inflation data that mostly beat estimates. In June, Singapore’s headline CPI rate clocked in at 0.6% y/y as expected, but the core reading was 1.7% y/y versus 1.5% anticipated. Despite this, USD/SGD[6] was unimpressed as the result
