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Categorized | Currencies

EM currencies firm slightly after weakening to record levels


Posted on November 24, 2016

The dollar is firmly in the driver’s seat in Asia forex trade, but it looks to be easing up on the gas for now as weakening by emerging markets currencies pares back in aftenoon trade for the Malaysian ringgit, Philippine peso and China’s renminbi.

Malaysia’s ringgit had softened today as much as 0.5 per cent to 4.4675 per dollar, weakness not seen since since the depths of the Asian financial crisis in January 1998. It has since firmed up a bit and now stands 0.4 per cent weaker at 4.4602 per dollar.

The Philippine peso had softened as much as 0.3 per cent to 50.02 against the greenback – the first time the currency hit the 50 mark since eight years ago to the day in November 2008. It has walked back from that line to be only 0.1 per cent softer at 49.930 per dollar.

China’s onshore renminbi has firmed as well, though the retracement amounted to strengthening 0.05 percentage points from its low point to be weaker by only 0.02 per cent at Rmb6.9201 against the dollar. The onshore exchange rate is restricted to move within a 4 per cent band, the midpoint of which was set weaker again today.

That is still the weakest level in more than 8 years and within spitting distance of the threshold of Rmb7 against the greenback.

The redback’s offshore rate, which isn’t technically limited by a band and is more open to international investor influence, is weaker by 0.1 per cent, though that still puts it at 6.9516 against the dollar – noticeably higher than its onshore kin.

The dollar index is currently 0.1 per cent higher at 101.780 in Asia trade, having closed Wednesday up 0.7 per cent.