Asia: Currencies mostly stronger against the USD in 2017 - ANZ

Sandeep Kanihama FXStreet Contributor

After four years of depreciation, Asian currencies put in a much stronger performance in 2017, points out the research team at ANZ.

Key Quotes

“Our Asian currency index shows a gain of almost 6% year-todate against the USD. The KRW was the strongest performer with a 10.6% appreciation, while the PHP was the worst with a loss of 2% due to a weakening external position. The unwinding of the Trump trade, a strong export recovery in Asia and strong investor risk appetite were behind Asian currency gains this year. China’s move to keep the RMB stable also helped to provide an anchor for the region.”

“How Asian currencies fare in 2018 depends on which of these two contrasting forces will dominate: (i) the effects of policy normalisation in the major advanced economies on global liquidity and ultimately on portfolio flows to Asia; and (ii) a strengthening and broadening in Asian economic growth with export recovery spilling over into domestic demand. We see growth winning out in the end, though the currency moves in the region will be more diffused with growth sensitive currencies outperforming, while high yielding currencies and those with external deficits underperforming.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

EUR/USD remains on the back foot below 1.1850

EUR/USD resumes its downtrend on Wednesday, navigating the area below the 1.1850 level in a context of modest gains in the US Dollar, while investors gear up for a slew of US data prior to the publication of the key FOMC Minutes.

GBP/USD flirts with daily highs near 1.3580

GBP/USD manages to set aside two consecutive daily declines and trades with slight gains in the 1.3580 zone on Wednesday. Cable’s uptick comes despite acceptable gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold retains bullish bias amid Fed rate cut bets, ahead of Fed Minutes

Gold sticks to modest intraday gains through the early European session, reversing a major part of the previous day's heavy losses of more than 2%, to the $4,843-4,842 region or a nearly two-week low. That said, the fundamental backdrop warrants caution for bulls ahead of the FOMC Minutes, which will look for more cues about the US Federal Reserve's rate-cut path.

Pi Network rally defies market pressure ahead of its first anniversary

Pi Network is trading above $0.1900 at press time on Wednesday, extending the weekly gains by nearly 8% so far. The steady recovery is supported by a short-term pause in mainnet migration, which reduces pressure on the PI token supply for Centralized Exchanges. The technical outlook focuses on the $0.1919 resistance as bullish momentum increases.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Top 3 Price Prediction: Bitcoin, Ethereum, and Ripple face downside risk as bears regain control

Bitcoin, Ethereum, and Ripple remain under pressure on Wednesday, with the broader trend still sideways. BTC is edging below $68,000, nearing the lower consolidating boundary, while ETH and XRP also declined slightly, approaching their key supports.