Morning deal: Oil adds pressure on Asian currencies – Reuters

Sept. 19 (Reuters) – A look at the day ahead in Asian markets from financial markets columnist Jamie McGeever.

The calm before the potential storm?

Ahead of a series of central bank meetings this week, including the latest decision, outlook and guidance from the US Federal Reserve on Wednesday, investors began the week cautiously and major markets were range bound. tight negotiations.

The dollar slipped 0.2% on Monday, U.S. Treasury yields moved no more than 3 basis points on the curve and, remarkably, all three major Wall Street indexes ended the day at just 0 .07% of Friday’s close.

The main exception appears to be oil, which continues to hit new highs for the year, steadily climbing towards $100 per barrel. Brent crude is up 30% over the past three months and is up 10 over the past 12 weeks.

In theory, that’s not such a bad thing for Asian oil and energy producers like Indonesia, and it should be a real headache for consumers, businesses, and policymakers in countries like the Japan and South Korea, which import almost all of their energy.

But on the surface, at least, the currencies of energy-importing and exporting countries are feeling the pressure.

Yen traders appear to have completely ruled out the possibility of a hawkish policy change from the Bank of Japan later this week and are pushing the yen to new lows for the year, while the South Korean won Korean has lost around 5% since July.

The Indian rupee is again hovering around record lows against the dollar, the Chinese yuan is struggling to rebound from a 16-year low hit earlier this month, and the Indonesian rupiah has slipped about 5%. since May to reach its lowest level in six months.

Of course, other factors come into play here, including the overall strength of the U.S. dollar, bolstered by surprisingly resilient U.S. economic data and a large, persistent yield advantage over its major rivals.

Asian currencies have generally performed poorly this year. Smelling blood and being highly sensitive to the path of least resistance, currency traders may sense that surging energy prices provide another level of vulnerability that Asian currencies can prey on.

Could soaring oil prices feature in central banks’ series of policy decisions and outlooks this week? In Asia, there will be central bank meetings in Taiwan, the Philippines and Indonesia on Thursday, and in Japan on Friday.

Tuesday’s economic calendar in Asia and the Pacific is rather light, with the latest minutes of the Reserve Bank of Australia’s latest policy meeting being the main event. Malaysian trade data and Philippine balance of payments figures are also available.

Here are the key developments that could give markets a better direction on Tuesday:

– Minutes of the Reserve Bank of Australia meeting

– Commerce Malaysia (August)

– Philippine balance of payments (August)

Our Standards: The Thomson Reuters Trust Principles.

The opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence and freedom from bias.