Malaysia: FMM against offshore trading of Ringgit
The Federation of Malaysian Manufacturers (FMM) has expressed concern about the strong Ringgit and its possible internationalization, saying that stability in the currency’s exchange rate is of “utmost importance”. “It is stability of the Ringgit and the freedom to remit dividends and capital that attract long-term investments, including FDI, the FMM said. It added that a strengthening of the MYR should not be used as a primary indicator of strength of the economy. To recap, there is speculation that the Ringgit will once again be traded in the international markets, five years after it was de-pegged from the US dollar. (StarBiz)
Indonesia: IMF says policy should be 'more proactive' . Bank Indonesia should signal a greater readiness to boost borrowing costs amid signs of acceleration in the economy, the International Monetary Fund said. "I think they'll need to be more proactive going forward on monetary policy," Thomas Rumbaugh, division chief at the IMF's Asia & Pacific Department, said. "We believe there needs to be a stronger commitment to reducing inflation and keeping it low." (Source: Bloomberg)
Singapore: Exports unexpectedly accelerate on drugs, electronics
Singapore’s export growth unexpectedly accelerated in August as sales of electronics and pharmaceuticals rebounded. Non-oil domestic exports climbed 31.2% from a year earlier, after a revised 18.3% gain in July, the trade promotion agency said in a statement. That’s the fastest pace since December 2005, according to previously reported data. The median forecast of 10 economists surveyed was for an increase of 16.2%. (Bloomberg)
Japan: Bank of Japan keeps Yen in system after intervention
The Bank of Japan refrained from removing funds in the financial system, leaving deposits held by institutions at the bank at the highest level this month after the nation’s first currency intervention since 2004. Deposits climbed by JPY2trn (USD23.4 bn) to JPY17.1trn, the central bank said. (Bloomberg)
Australia: Gillard’s Dollar peaking as tax proves Aussie 27% overvalued
Australia’s dollar, this quarter’s best performing major currency, is now the most overvalued. Purchasing power parity, a measure of the cost of goods relative to other countries, shows the so-called Aussie is 27% too expensive, according to data compiled by Bloomberg. The median estimate of strategists and economists is for it to weaken by 6% by year-end, the fourth-worst performance of 31 currencies tracked by Bloomberg. (Bloomberg)
US: Home sales, goods orders probably rose
Home sales probably increased in August, a sign the US real estate market is stabilizing after the expiration of a tax credit caused demand to plunge, economists said before reports this week. Purchases of new and previously owned homes rose 7% to a combined 4.395m annual pace, according to the median forecast in a survey. (Bloomberg)
US: Consumer sentiment hurt by delay in extending tax cuts
Concern that US personal income taxes will increase next year caused an unexpected decline in consumer confidence in September, indicating the biggest part of the economy will struggle to pick up. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment dropped to a one-year low of 66.6, figures showed. A separate report from the Federal Reserve showed household wealth declined 2.8% in the second quarter as stock prices fell. (Bloomberg)
US: Fed likely to keep rates low, affirm asset floor, survey shows
The Federal Reserve this week is likely to affirm its pledge to keep interest rates low for an “extended period” and maintain the floor on its holdings of securities, say economists surveyed by Bloomberg. The Fed’s Open Market Committee at its 21 Sept meeting will hold off from expanding the balance sheet by purchasing securities, according to 60 of 64 analysts surveyed. 54 of 63 economists said the Fed will leave unchanged a sentence saying high unemployment and low inflation warrant “exceptionally low” rates for an “extended period.” (Bloomberg)
US: Household worth fell in second quarter
Household wealth in the US fell 2.8% in the second quarter as share prices were depressed by the European debt crisis, marking a setback for Americans’ efforts to repair finances battered by the recession. Net worth for households and non-profit groups declined by USD1.5trn to USD53.5 trn, according to the Federal Reserve’s Flow of Funds report issued in Washington. (Bloomberg)
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