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Ahead Today G3: EC CPI. US housing starts, initial jobless claims Asia: SG NODX. MY trade. BI decision. BSP decision. |
Market Highlights
The USD weakened slightly on Wednesday. DXY pulled back to 106.28 at close from 106.40 prior. G10 currencies were mixed against the USD. EUR gained by 0.44%, and GBP by 0.41%, while AUD was down by 0.22% and JPY by 0.16%. US Fed officials highlighted that rate hikes will continue. Mary Daly said that a pause in rate hikes was “off the table” and John Williams said that the Fed should avoid incorporating financial stability risks into its considerations. Retail sales grew by 1.3% m/m in October after a flat performance a month ago. This supported views that the Fed can afford to hike more. At the same time, cryptocurrency risks remained and may add to the risk aversion mood. Meanwhile, event risks have faded slightly after US President Joe Biden said that it is “unlikely” that the missile that hit Poland was fired from Russia. The G20 summit concluded with a statement against Russia aggression in Ukraine.
Regional FX
Regional currencies pulled back against the USD on Wednesday. CNY weakened by 0.74% against the USD. IDR was down by 0.42%, the THB by 0.28% and the PHP by 0.22%. The SGD was more resilient against the moves. In the coming session, focus will shift to central bank decisions in the Philippines and Indonesia. Markets anticipate respective 75bps and 50bps rate hikes for both markets. There is a chance of some rebounds of the dollar in the coming session, which may imply at some slight weaknesses in AXJ currencies.
DXY and ADXY
Source: Bloomberg
