Fx Thoughts : Uncovered By Haze
A truly amazing week if we consider that some of these currency moves have not been seen in over a decade and of course, we are talking about the MYR which has the SGD and IDR in tow as the haze subsides.
Much as many say this move is led by the IDR simply because it has appreciated 9.2% against the USD in just 5 working days (do not say we didn’t warn you about the “haze affect” and the IDR correlation with haze levels), the fact is that we have not seen such a move in the MYR since 1998 unlike the IDR which made this move more recently, back in 2009.
For the Malaysians working in Singapore, it has been a 15% pay raise for 2015 as the queues at the Arcade grew in strength during August and money changers ran out of Ringgit to sell to the savvy Singaporean retail buyer when the SGDMYR broke M$3, a historic high. http://www.straitstimes.com/business/rush-as-ringgit-falls-to-rm3-to-s1-0
While we may think the worst is over, it does not appear to be panning out too well even as we end the week on a high and an amazing recovery from the dumps we were seeing just 2 weeks ago as bonds, equities and currencies of Asia rebounded back strongly to give the region some relief just as the haze situation has cleared up for the skies of Singapore, Malaysia and Indonesia.
The headlines that we are ending the week with.
*BANK INDONESIA SEES RUPIAH MOVE DUE TO CONFIDENCE IN REFORMS
*BANK INDONESIA CONTINUES TO INTERVENE IN MARKET
*BANK INDONESIA: SIGNIFICANT MOVE MEANS MANY CUT LOSSES ON IDR
*BANK INDONESIA SEES FED DELAYING RATE-RISE UNTIL AFTER 1Q 2016
Senior Deputy Governor Mirza Adityaswara tells reporters in Jakarta.
*MALAYSIA CENTRAL BANK SAYS IT REVOKED 3 APPROVALS GRANTED TO 1MDB
*MALAYSIA CENTRAL BANK SAYS 1MDB DIDN’T GIVE COMPLETE DISCLOSURE
*BANK NEGARA SAID 1MDB APPROVALS WERE FOR $1.83B OF INVESTMENTS
*BANK NEGARA SAID 1MDB APPROVALS WERE INVESTMENTS OVERSEAS
*BANK NEGARA SAYS RECOMMENDED CRIMINAL PROCEEDINGS AGAINST 1MDB
*BANK NEGARA SAID IT ASKED 1MDB TO REPATRIATE $1.83B TO MALAYSIA
And the show in Malaysia is coming to a close as 1MDB Commits to Cooperate and Continue Engaging With Bank Negara and the truth is that investors are not really interested in much except that their investments will be safe when headlines settle down and we note that the prosecutions in the name of justice have stopped short at the Malaysian prime minister which is a good sign, so far.
“”The Prime Minister (Datuk Seri Najib Tun Razak) has asked for six months (to settle the 1MDB issue). I guess early next year, January it can be resolved,” said Barisan Nasional (BN) Strategic Communications director Datuk Abdul Rahman Dahlan.” http://www.bernama.com/bernama/v8/sp/newssports.php?id=1178170