4 Apr 2014
Asia EM Express: China's SAFE warns about negative impact of Fed's QE taper on EM
FXStreet (Łodź) - China's State Administration of Foreign Exchange said in its latest bulletin released on Friday that the Fed's ongoing reduction of asset purchases could be harmful for emerging market economies, by producing large capital outflows. EM volatility could negatively affect the Chinese economy, but ultimately the problems should be overcome, the SAFE believes.
The foreign exchange regulator also announced that it would step up the efforts to modernize the Chinese FX management system and that it would promote yuan's capital account convertibility.
Furthermore, the SAFE said that China's 2013 capital account surplus was at USD 326.2B and the current account surplus at USD 182.8B. The surplus to GDP ratio should remain in a reasonable zone, the regulator stressed.
Earlier on Friday, Dallas Fed president Richard Fisher said in a speech delivered at the Asia Society in Hong Kong that Chinese holdings of US Treasury debt wouldn't determine the US central bank's moves.
Economic data
On Thursday Philippines released inflation data. On an annual basis CPI rose 3.9% in the last quarter, down from 4.1% seen in the previous quarter and against forecasts of ticking up to 4.2%. Month-on-month inflation fell 0.1%, compared to 0.1% growth. Core CPI increased 2.8%, following 3% and slightly below forecasts of 2.9%.
On Friday the Department of Statistics Malaysia informed that the county's trade surplus widened to USD 10.40B in February from USD 6.40B in January, above expectations of a 8.90B. Exports climbed 12.3%, up from 12.2 and beating forecasts of 12.1%. Imports grew 9.5%, following 7.2% and below consensus of 14.1%.
Technicals
USD/CNY rose by 0.09% to 6.2160. The daily FXStreet Trend Index was slightly bearish, and the OB/OS Index neutral. RSI was neutral at 67 at the last close and has declined to 60 so far today. Daily 2-StDev Volatility Bandwidth was shrinking at 326 pips, with ATR (14) shrinking at 134 pips. The 1D 200 SMA was at 6.1082, while the 1D 20 EMA was at 6.1866.
.
The foreign exchange regulator also announced that it would step up the efforts to modernize the Chinese FX management system and that it would promote yuan's capital account convertibility.
Furthermore, the SAFE said that China's 2013 capital account surplus was at USD 326.2B and the current account surplus at USD 182.8B. The surplus to GDP ratio should remain in a reasonable zone, the regulator stressed.
Earlier on Friday, Dallas Fed president Richard Fisher said in a speech delivered at the Asia Society in Hong Kong that Chinese holdings of US Treasury debt wouldn't determine the US central bank's moves.
Economic data
On Thursday Philippines released inflation data. On an annual basis CPI rose 3.9% in the last quarter, down from 4.1% seen in the previous quarter and against forecasts of ticking up to 4.2%. Month-on-month inflation fell 0.1%, compared to 0.1% growth. Core CPI increased 2.8%, following 3% and slightly below forecasts of 2.9%.
On Friday the Department of Statistics Malaysia informed that the county's trade surplus widened to USD 10.40B in February from USD 6.40B in January, above expectations of a 8.90B. Exports climbed 12.3%, up from 12.2 and beating forecasts of 12.1%. Imports grew 9.5%, following 7.2% and below consensus of 14.1%.
Technicals
USD/CNY rose by 0.09% to 6.2160. The daily FXStreet Trend Index was slightly bearish, and the OB/OS Index neutral. RSI was neutral at 67 at the last close and has declined to 60 so far today. Daily 2-StDev Volatility Bandwidth was shrinking at 326 pips, with ATR (14) shrinking at 134 pips. The 1D 200 SMA was at 6.1082, while the 1D 20 EMA was at 6.1866.
.