Many Asian currencies barely moved on Thursday, ahead of United States payroll data, except for China’s yuan, which surged to a near seven-month high with help from dollar-selling by major state-owned Chinese banks. “The movement of regional currencies, except the yuan, is a reflection of the range-bound price action in the dollar,” said Sim Moh Siong, FX strategist at the Bank of Singapore “Right now, I think the market is waiting for the U.S. payroll data” due on Friday, he said.
The Malaysian ringgit fell around 0.2 percent to 4.28 to the dollar, its lowest level since May 24. Factory activity in the commodities-exporting country in May contracted as output and new orders declined, a private survey showed. The Thailand baht fell about 0.3 percent to 34.160 against the dollar. Headline consumer prices unexpectedly dropped in May from a year earlier, their first decline in 14 months.
Thailand’s central bank said it will hold a news conference on foreign exchange regulation reforms on Monday, as policymakers remain focussed on tamping down a strong baht. The Indonesian rupiah did not trade on Thursday, a public holiday. Emerging markets have seen increased investor interest of late, with the region seeing a fourth straight month of net portfolio inflows above $20 billion from foreign investors in May, a survey showed Wednesday.
The yuan was up around 0.25 percent to 6.8008 against the dollar, on track for its fourth consecutive session of gains. Earlier, major state-owned Chinese banks were seen selling dollars at around the 6.80 per dollar level in the onshore foreign exchange market. The dollar selldown comes as a part of China’s war on depreciation
The dollar selldown comes as a part of China’s war on depreciation expectations, after Moody’s Investors Service downgraded the country’s long-term local and foreign currency issuer ratings last week. China’s central bank on Thursday pushed the reference rate for the yuan up by 0.8 percent, the midpoint’s second largest one-day appreciation since the currency was de-pegged from the dollar in 2005. The spot rate soon followed suit.
The Indian rupee gained about 0.1 percent on Thrusday. On Wednesday, the government announced a slowdown in economic growth, to 6.1 percent, in the first quarter of 2017 from a year earlier. The rate was 7.0 percent in the previous quarter.