The US Dollar was overwhelmingly weak against all Asian currencies last Friday. As a result, many USD/Asia pairs continued to trade lower, particularly, USD/CNH has now fallen below 6.60 to 6.58, while USD/SGD has now traded below 1.35 to 1.3485.
The US dollar sank to its lowest level in over two months against the major currencies on Friday, as vote counting for the contentious US election dragged on. The US Dollar Index (DXY) tumbled to lows around 92.184 before closing around 92.229.
The US Dollar remained overwhelmingly weak against all Asian currencies. The onshore CNY stayed strong and as a result continue to pin USD/CNY at 6.61. On the other hand, the offshore CNH has strengthened further and pushed USD/CNH below 6.60 to 6.58. Similarly, across Asia, USD/KRW fell below 1,130 to 1,120, USD/RM dropped below 4.15 to 4.1290, USD/THB drifted below 31 to 30.60 and USD/IDR was lower in tandem from 14,400 to 14,200.
Asian equities benchmarks mostly closed last Friday in the green as the risk-on sentiment prevailed on expectations that Joe Biden will eventually win the election. Indonesia’s JCI led the rally with a 1.4% gain to 5,335, followed by India’s SENSEX with a 1.3% gain to 41,893 and Malaysia’s KLCI with a 1.2% gain to 1,519.
However, North Asian equities did not fare that well, with Taiwan’s TWSE and South Korea’s KOSPI registering weaker gains of 0.4% to 12,973 and 0.1% to 2,416. Furthermore, Hong Kong’s Hang Seng ended with a marginal gain of 0.06% to 25,712 as both Shanghai SCOMP and Shenzhen SZCOMP ended up in the red with losses of -0.2% to 3,312 and – 0.7% to 2,282 respectively.
US Treasury yields climbed higher on Friday, lifted by the better-than-expected October US employment data, whilst the market kept a close eye on the latest election developments. The closely-watched part of the US Treasury yield curve measuring the gap between yields on 2- and 10-year Treasury notes steepened, up at around 67.20bps. It had widened to as much as 77bps on Wednesday.
In terms of front end rates, 3M Sibor was unchanged at 0.40% while 3M SOR drifted 1 bps lower to 0.17% and overnight SORA eased another 2 bps back down to just under 5 bps. In the back end, the 10 year Singapore Government Securities (SGS) yield stayed soft under 80 bps.
Oil fell below $40/bbl on Friday as drawn-out vote counting in the US presidential election kept markets on edge and new lockdowns in Europe to halt surging COVID-19 infections sparked concern over the demand. Brent crude fell $1.52, or 3.7%, to $39.41/bbl. West Texas Intermediate (WTI) crude settled 4.3%, or $1.65, lower at $37.14/bbl.
The Malaysian government presented Budget 2021 with significantly more expansionary and inclusive measures to steer the economy out of a recession towards post-recovery growth under the new normal.
The outlays for government expenditure totals RM322.5bn (or 20.6% of GDP) in 2021 with a record development expenditure allocation of RM69.0bn and a dedicated COVID-19 fund worth RM17bn for stimulus packages and recovery plans.
Source: UOB Global Economics and Market Research
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