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Asian local currencies jump on fading rate hike expectations

by ChemOrbis Editorial Team - content@chemorbis.com
  • 07/10/2015 (14:56)
According to media reports, Indonesia’s rupiah posted its best daily performance seen in recent years on fading expectations for an imminent US interest rate hike as well as central bank intervention to stabilize the currency. The local currency rallied 2.8% to 13,850 against the US dollar which would be the largest daily increase seen since December 2008 if it sustains the gains until the closure of markets. The Indonesian currency rose 1.8% on October 6, posting the biggest rise since September 2009.

Some analysts reported that capital inflows returning to the market in the days ahead will further support the local currency.

Meanwhile, Malaysia’s ringgit is also poised for its largest daily gain seen in two years owing to stronger exports data in August and a pick-up in oil prices. The ringgit rose 2.2% against the US dollar, posting the strongest gain seen since September 2013 on the back of higher exports which climbed 4.1% in August compared with the same month of 2014. The August export data also topped Reuters’ economists’ initial expectations which called for an increase of 2%.

The ringgit posted the lowest levels seen in more than 17 years in the first half of September as The possibility that the US Federal Reserve could implement a rate increase and lower crude oil prices were also weighing down Malaysia’s economy which is the only major net oil exporter in the region.
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