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15 May 2014
Asia EM Express: Indonesian rupiah surges on presidential race developments
FFXStreet (Łódź) - In recent developments in the Indonesian election campaign, the presidential front runner Joko Widodo from the largest PDI-P party, has gained the support of the second biggest Golkar party. The coalition should scoop about 49.9% of the seats in Parliament.
Apart from cementing a strong majority, this move boosts Joko Widodo's chances of becoming president in the first round of elections on July 9. The news of the PDI-P and Golkar partnership increased risks to the short IDR leg.
“Widodo, the mayor of Jakarta, has widespread popular support and perhaps the best chance of delivering economic reform, although his agenda is little known,” the RBS team of analysts comment. “The greater prospect of his victory is helping the IDR to strengthen – it was the strongest currency in Asia on Wednesday.”
The fall of the Korean won on Wednesday was attributed by the markets to official intervention. The strength of the currency has been worrying the authorities of late, with Trade Minister Yoon Sang Jick warning yesterday that it could hurt small exporters.
Economic data
The Singapore of Department Statistics informed on Thursday that month-on-month Retail Sales plunged 4% in March, compared with the 2.7% increase in February and below forecasts of dropping 1.3%. On an annual basis Retail Slaes dipped 3.9%, up from the 9.7% decline and below expectations of -3%.
Indian WPI Inflation, also published on Thursday, showed 5.2% growth in April, down from the 5.7% rise seen the previous month and below consensus of a 5.73% increase.
Technicals
The Indonesian Rupiah rose to the highest level since March 22 on Wednesday. At the moment of writing it was down by 0.03% at 11445.00.
On Wednesday the USD/IDR daily FXStreet Trend Index was slightly bearish, with the OB/OS Index neutral. RSI was at 42 at the last close, and has moved up to 44 so far today. The 1D 200 SMA was at 11,566.29, while the 1D 20 EMA was at 11,515.03.
RBS analysts comment on the Korean won's Wednesday moves: “Ahead of the probable intervention yesterday, the USD/KRW reached a low since 2008 of 1020.97, suggesting that 1020 may be a line in the sand for the time-being.”
On Thursday USD/KRW was down 0.09% at 1026.45. On Wednesday the USD/KRW daily FXStreet Trend Index was strongly bearish, with the OB/OS Index neutral. RSI was at 38 at the last close, and has climbed to 48 so far today. The 1D 200 SMA was at 1,067.56, while the 1D 20 EMA was at 1,032.11.
Apart from cementing a strong majority, this move boosts Joko Widodo's chances of becoming president in the first round of elections on July 9. The news of the PDI-P and Golkar partnership increased risks to the short IDR leg.
“Widodo, the mayor of Jakarta, has widespread popular support and perhaps the best chance of delivering economic reform, although his agenda is little known,” the RBS team of analysts comment. “The greater prospect of his victory is helping the IDR to strengthen – it was the strongest currency in Asia on Wednesday.”
The fall of the Korean won on Wednesday was attributed by the markets to official intervention. The strength of the currency has been worrying the authorities of late, with Trade Minister Yoon Sang Jick warning yesterday that it could hurt small exporters.
Economic data
The Singapore of Department Statistics informed on Thursday that month-on-month Retail Sales plunged 4% in March, compared with the 2.7% increase in February and below forecasts of dropping 1.3%. On an annual basis Retail Slaes dipped 3.9%, up from the 9.7% decline and below expectations of -3%.
Indian WPI Inflation, also published on Thursday, showed 5.2% growth in April, down from the 5.7% rise seen the previous month and below consensus of a 5.73% increase.
Technicals
The Indonesian Rupiah rose to the highest level since March 22 on Wednesday. At the moment of writing it was down by 0.03% at 11445.00.
On Wednesday the USD/IDR daily FXStreet Trend Index was slightly bearish, with the OB/OS Index neutral. RSI was at 42 at the last close, and has moved up to 44 so far today. The 1D 200 SMA was at 11,566.29, while the 1D 20 EMA was at 11,515.03.
RBS analysts comment on the Korean won's Wednesday moves: “Ahead of the probable intervention yesterday, the USD/KRW reached a low since 2008 of 1020.97, suggesting that 1020 may be a line in the sand for the time-being.”
On Thursday USD/KRW was down 0.09% at 1026.45. On Wednesday the USD/KRW daily FXStreet Trend Index was strongly bearish, with the OB/OS Index neutral. RSI was at 38 at the last close, and has climbed to 48 so far today. The 1D 200 SMA was at 1,067.56, while the 1D 20 EMA was at 1,032.11.