in ,

US Dollar Still Struggling: USD/SGD, USD/IDR, USD/MYR, USD/PHP


US Dollar, Singapore Dollar, Indonesian Rupiah, Malaysian Ringgit, Philippine Peso – Talking Points

  • US Dollar traded mixed against ASEAN currencies on stimulus limbo
  • USD/SGD, USD/IDR, USD/MYR, USD/PHP eyeing external forces
  • Key event risk: US GDP, earnings season, Brexit talks, rising Covid

US Dollar ASEAN Weekly Recap

The haven-linked US Dollar traded little changed this past week against its ASEAN counterparts. The Philippine Peso and Indonesian Rupiah were notable outperformers while the Singapore Dollar and Malaysian Ringgit were more restrained. Pairs like USD/PHP and USD/SGD can be sensitive to external news flow driving market sentiment. On this front, back and forth in US fiscal stimulus talks kept investors on the edge.

Perhaps one of the reasons why the Philippine Peso outperformed was the unwinding of lockdowns in Manila. Philippine Central Bank Governor Benjamin Diokno also mentioned last week that third-quarter GDP is expected to be ‘much much better’ compared to the previous one. Softer-than-expected Chinese Q3 GDP data also likely kept risk appetite at bay around the Asia Pacific region.

Last Week’s US Dollar Performance

*ASEAN-Based US Dollar Index averages USD/SGD, USD/IDR, USD/MYR and USD/PHP

External Event Risk – US Fiscal Stimulus, GDP, Brexit Talks, Rising Covid Cases

The week ahead is rather busy outside of the ASEAN and Asia Pacific region which can have consequential implications for global risk trends. There continues to be conflicting cues from policymakers in Washington around fiscal stimulus progress. Speaker of the House Nancy Pelosi said a package can be passed before the November 3rd election if President Donald Trump backs it. However, there remains restraint in the Senate.

Treasury Secretary Steven Mnuchin noted that there are still significant differences and White House Economic Adviser Larry Kudlow noted that the ball ‘is not much moving’. If a package is not passed before the election, stock markets may remain in limbo until the makeup of the new government is known. Brexit talks also appear to be slowly making progress, helping to reduce uncertainty to an extent.

Third-quarter US GDP will cross the wires on Thursday and a record 31.8% q/q rebound is expected after the worst-ever contraction in Q2 at -31.4%. However, much of this may have already been priced in by markets. Having said that, the Citi Economic Surprise Index tracking the US fell to its lowest since the middle of June at 127.90 on Friday. This is down from a peak 270.80 in early July.

This means that since the summer, US data surprises have been increasingly lackluster, opening the door to disappointment. Q3 earnings season continues, with tech giants Facebook, Apple and Google (Alphabet) reporting. Thus far, it has been an overall rosy earnings season and more upside outcomes may help keep risk appetite intact. Covid-19 cases are however on the rise globally, opening the door to more lockdowns.

ASEAN, South Asia Event Risk – Singapore Industrial Production, Malaysian Trade Data

The ASEAN economic docket is fairly light. On Monday, Singapore industrial production will cross the wires. That can help offer a clearer picture of global growth. That is because Singapore is heavily reliant on the external sector. Then, Malaysian trade data is due on Wednesday. Given the prevalence of external risks, USD/SGD, USD/MYR, USD/IDR and USD/PHP may spend more of their time focusing on market mood – see below.

On October 23rd, the 20-day rolling correlation coefficient between my ASEAN-based US Dollar index and the MSCI Emerging Markets Index remained unchanged at -0.90 from last week. Values closer to -1 indicate an increasingly inverse relationship, though it is important to recognize that correlation does not imply causation.

ASEAN-Based USD Index Versus MSCI Emerging Markets Index – Daily Chart

Chart Created Using TradingView

*ASEAN-Based US Dollar Index averages USD/SGD, USD/IDR, USD/MYR and USD/PHP

– Written by Daniel Dubrovsky, Currency Analyst for

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

What do you think?


Leave a Reply

Your email address will not be published. Required fields are marked *



S&P 500 Recovery in the Works? Biden Leading in Key Swing States


Dow Jones Futures Fall, Hang Seng Risks Pullback, China Plenum in Focus