DBS 星展银行：2007年亚洲地区各国货币展望

24 January 2007 19页　　英文

Overview
The currency market has opened the year 2007 on a dichotomous note. Driving major currencies were interest rate outlooks, favoring yen funded yield carry trades. These carry trades face unwinding risks once the market has fully taken back US rate cut expectations, more so if rate hike expectations resurface again for Japan in Feb. Concomitantly, the global imbalances story will continue to be played out in the form of a weaker US dollar against Asian currencies, especially into next month’s G7 meeting. Following Thailand’s capital control shock in Dec06, investors will be more discerning this year. Favored Asian currencies are those of countries that welcome capital inflows and have economies that are capex-led and resilient to external cyclical headwinds.

USD: The G7 meeting and Bernanke’s congressional testimonies beckon caution for USD bulls in February
EUR: Looking for “strong vigilance” at ECB meeting to power higher
JPY: Awaiting a more resolute Bank of Japan rate hike policy to provide currency relief from yield carry trades
CNY: The Eurozone joins the US in pushing for faster yuan appreciation at the Feb G7 meeting
HKD: No threat to HKD-USD peg despite CNY gains against HKD beyond parity
TWD: Selling pressures from JPY mitigated by bullish Taiwan stocks
KRW: To underperform with the Kospi and lower business capex plans
SGD: Proving resilient to external cyclical headwinds, in favour of domestic capex-led growth story
MYR: Outlook upgraded as Malaysia picked up the investor ball dropped by Thailand
THB: Outlook dampened as the Bank of Thailand prioritises monetary policy towards growth, away from inflation
IDR: Stable with a positive bias; improving the investment climate is key to offseting fears of hot money reversal
PHP: Medium-term bullishness intact; structural improvements move from narrowing fiscal deficit towards debt reduction
INR: Reducing risks on emerging overheating concerns