25 Apr 2014
Asia EM Express: Yuan devaluation worries markets
FXStreet (Łódź) - Market participants' concerns about China's intervention aimed at slowing down the appreciation of the yuan have been rising recently. The currency touched the 16-month low for the third running day on Friday, weakening below the 6.25 level.
“Yuan devaluation has reached 3.1pc this year," Ambrose Evans-Pritchard pointed out today in his blog at The Telegraph. “The longer this goes on, the harder it is to accept Beijing’s story that it is one-off measure to teach speculators a lesson and curb hot money inflows.”
The analyst believes that by continuing yuan's devaluation China could be “exporting deflation worldwide.”
Meanwhile, according to Xinhua, Guan Tao, head of the balance of payment department under the State Administration of Foreign Exchange assured today that "it is a normal phenomena for a currency's exchange rate to either rise or fall and we should pay more attention to the medium and long-term trend of the yuan."
Economic data
On a monthly basis Singapore's Industrial Production grew by 6.1% in March, down from the 6.5% increase in February and considerably above forecasts of +1.5%, data released on Friday showed. Year-on-year Industrial Production climbed 12.1%, following a 13.1% rise and beating expectations of +6.3%.
Indonesia saw a sharp slowdown in annual foreign direct investment (FDI) growth in Q1 2014 to 9.8% from 25.4% recorded in Q4 2013, the Indonesia Investment Coordinating Board said on Wednesday.
Also on Wednesday Philippines published Imports numbers which plunged to the lowest level in four months of 0.3% in February from 21.8% in January. The country's trade deficit narrowed to USD-66M from USD-1,376M.
Technicals
USD/CNY was up by 0.10% at 6.2544. On Thursday the daily FXStreet Trend Index was slightly bullish, with the OB/OS Index overbought. RSI sat at 75 at the last close, and has slid to 63 so far today. Daily 2-StDev Volatility Bandwidth was expanding at 125 pips, with ATR (14) expanding at 109 pips. The 1D 200 SMA was at 6.1143, while the 1D 20 EMA was at 6.2169.
“Yuan devaluation has reached 3.1pc this year," Ambrose Evans-Pritchard pointed out today in his blog at The Telegraph. “The longer this goes on, the harder it is to accept Beijing’s story that it is one-off measure to teach speculators a lesson and curb hot money inflows.”
The analyst believes that by continuing yuan's devaluation China could be “exporting deflation worldwide.”
Meanwhile, according to Xinhua, Guan Tao, head of the balance of payment department under the State Administration of Foreign Exchange assured today that "it is a normal phenomena for a currency's exchange rate to either rise or fall and we should pay more attention to the medium and long-term trend of the yuan."
Economic data
On a monthly basis Singapore's Industrial Production grew by 6.1% in March, down from the 6.5% increase in February and considerably above forecasts of +1.5%, data released on Friday showed. Year-on-year Industrial Production climbed 12.1%, following a 13.1% rise and beating expectations of +6.3%.
Indonesia saw a sharp slowdown in annual foreign direct investment (FDI) growth in Q1 2014 to 9.8% from 25.4% recorded in Q4 2013, the Indonesia Investment Coordinating Board said on Wednesday.
Also on Wednesday Philippines published Imports numbers which plunged to the lowest level in four months of 0.3% in February from 21.8% in January. The country's trade deficit narrowed to USD-66M from USD-1,376M.
Technicals
USD/CNY was up by 0.10% at 6.2544. On Thursday the daily FXStreet Trend Index was slightly bullish, with the OB/OS Index overbought. RSI sat at 75 at the last close, and has slid to 63 so far today. Daily 2-StDev Volatility Bandwidth was expanding at 125 pips, with ATR (14) expanding at 109 pips. The 1D 200 SMA was at 6.1143, while the 1D 20 EMA was at 6.2169.