ASEAN Weekly Outlook – USD/IDR, USD/MYR, USD/PHP, USD/SGD
- USD[1] appreciation as a safe haven amidst Turkish worries weighed on ASEAN bloc currencies
- A hawkish Bank of Indonesia may not offer much to IDR if worries on Turkey and Brexit linger
- USD/SGD[2] may rise on a bullish continuation pattern, but for now July resistance still holds
We released our 3Q forecasts for the US Dollar and equities in the DailyFX Trading Guides page[3]
The advance in the US Dollar[4] last Friday, which behaved as a safe haven amidst concerns on European bank exposure on Turkey[5], weighed on ASEAN bloc currencies such as the Philippine Peso and Indonesian Rupiah. This was amplified after US President Donald Trump authorized the doubling of tariffs on Turkish steel and aluminum exports.
Meanwhile the Philippines, Malaysia and Indonesia continued spending foreign reserves amidst weakness in their currencies this year. USD/PHP still rose despite a hawkish rate increase from Bangko Sentral ng Pilipinas (BSP) last week where Governor Nestor Espenilla alluded to more increases ahead.
The US Dollar’s potential role as the world’s reserve currency amidst trade war tensions and geopolitical risk can be a preview of what we can expect for other currencies like the Malaysian Ringgit and Singapore Dollar ahead.
One of the top-tier event risks next week will be a monetary policy announcement from the Bank of Indonesia. The central bank is expected to leave its seven-day repo rate unchanged at 5.25%, but it
