US dollar continues to strengthen against ASEAN currencies
According to media reports, the Malaysian ringgit has posted the steepest fall of any currency among Asian emerging markets, falling approximately 23% against the dollar to reach the lowest levels seen since 1998, breaching the 4 ringgit per dollar threshold. Weaker oil prices have directly impacted the oil producing country while the recent devaluation of the Chinese yuan also put some downward pressure on the currency.
Nearby Indonesia has seen the second steepest currency decline among emerging Asian markets, falling more than 9% during 2015 to sink to more than 13,800 rupiah to the dollar. The currency continued to weaken even after the government mandated that almost all local transactions must be completed in rupiah in a bid to shore up the currency.
In Vietnam, the central bank doubled the size of the dong/dollar trading band in an effort to compensate for the Chinese central bank’s decision to devalue the yuan. The bank now allows the dong to trade within 2% of the mid-point, established by the bank at 21,673 dong per dollar on May 7 after the bank devalued the currency by 1%. Following the bank’s move, the dong sank to a record low of around 22,040 to the dollar.
In Thailand, the baht sank to its lowest level since April 2009 at around 35.64 to the dollar following a deadly bombing at a Bangkok religious site, which some analysts believe could negatively affect tourism revenues. Analysts commented that the Thai economy is vulnerable as domestic demand and exports both weakened in the second quarter.
The Philippines has also seen its currency weaken to the lowest level in five years as the peso broke below 46 to the dollar last week shortly after the Chinese Central Bank’s decision to devalue the yuan. However, central bank officials commented that the peso has been one of strongest currencies in the region this year while adding that they are confident that strong macroeconomic fundamentals will provide some support to the peso.
More free plastics newsPlastic resin (PP, LDPE, LLDPE ,HDPE, PVC, GPS; HIPS, PET, ABS) prices, polymer market trends, and more...
- Turkey’s PP and PE markets propelled to a firm start to H2 despite vulnerable conditions
- Asian PVC sees V-shaped recovery in Q2, what will Q3 bring?
- Will capacity additions cast cloud on ethylene upsurge in Asia?
- US PVC offers in Egypt rise steadily but resistance grows in tandem
- PE buyers’ resistance grows in SEA; duty-free origins more competitive than Mid-East
- Polymer demand cools in Turkey: Is price correction ahead for PP, PE and PVC?
- China’s rising PET trend takes a pause, but longer-term outlook remains firm
- Uptrend in China’s import PP market continues but cautious mood returns
- Hikes in Asia July PVC offers baffle some buyers, further rally under discussion
- Optimism is rising on resurgent demand in European polymer markets