All 10 major Asian currencies are forecast by strategists to fall against the dollar for a third year. They blame China.
Indonesia’s rupiah, South Korea’s won and the Singapore dollar are projected to decline the most in 2016, with India’s rupee seen depreciating the least. While the US Federal Reserve on Wednesday indicated four interest-rate increases next year, Taiwan cut on Thursday and economists are forecasting reductions in China, South Korea, Thailand, India and Indonesia to spur growth.
China’s slowdown is hurting Asian nations with strong trade linkages to the world’s second-biggest economy, and the Aug. 11 devaluation of the yuan clouded the outlook for a currency that had been source of stability in Asia during past crises. Goldman Sachs Group Inc. and JPMorgan Chase & Co. say Chinese renminbi weakness will infect exchange rates in the region and across emerging markets.
“The Chinese yuan trumps the US dollar so far in terms of its impact on Asian currencies," said Claudio Piron, co-head of Asian currency and rates strategy at Bank of America Merrill Lynch in Singapore. “Asia has a heightened sensitivity to the yuan, which represents the hub of the region’s supply chain to the rest of the world."
The yuan weakened almost 2% this month in Hong Kong’s offshore market, the most in Asia, and 1.3% in Shanghai after the People’s Bank of China allowed its decline versus the dollar to accelerate. Restrictions on trading are being lifted as the International Monetary Fund adds the currency to its reserve basket.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
Indonesia’s rupiah, South Korea’s won and the Singapore dollar are projected to decline the most in 2016, with India’s rupee seen depreciating the least. While the US Federal Reserve on Wednesday indicated four interest-rate increases next year, Taiwan cut on Thursday and economists are forecasting reductions in China, South Korea, Thailand, India and Indonesia to spur growth.
China’s slowdown is hurting Asian nations with strong trade linkages to the world’s second-biggest economy, and the Aug. 11 devaluation of the yuan clouded the outlook for a currency that had been source of stability in Asia during past crises. Goldman Sachs Group Inc. and JPMorgan Chase & Co. say Chinese renminbi weakness will infect exchange rates in the region and across emerging markets.
“The Chinese yuan trumps the US dollar so far in terms of its impact on Asian currencies," said Claudio Piron, co-head of Asian currency and rates strategy at Bank of America Merrill Lynch in Singapore. “Asia has a heightened sensitivity to the yuan, which represents the hub of the region’s supply chain to the rest of the world."
The yuan weakened almost 2% this month in Hong Kong’s offshore market, the most in Asia, and 1.3% in Shanghai after the People’s Bank of China allowed its decline versus the dollar to accelerate. Restrictions on trading are being lifted as the International Monetary Fund adds the currency to its reserve basket.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
0 comments:
Post a Comment