7 Apr 2014
Asia EM Express: World Bank trims Chinese and Thai growth forecasts
FXStreet (Łódź) - On Monday the World Bank has cut China's 20124 growth forecast to 7.6% from 7.7% seen previously, as the slowdown in the country's economic activity is becoming more and more apparent. The Thai growth forecast for this year was also reduced from 4.5% to 3%.
In case of China, the World Bank suggested however that the reforms announced recently by the country's government should prop up growth in the longer term.
"If implemented, the reforms will have a profound impact on China's land, labour, and capital markets, and enhance the long-term sustainability of its economic growth," the bank assured in the official report.
"Some reforms, including efforts to reduce regulatory and administrative burdens, reform taxation, and make more land available for commercial activities, are also likely to support growth in the short term."
The 2015 forecast of 7.5% was left unchanged.
Thailand's growth outlook reduction on the other hand was carried out on the back of concerns with the ongoing political unrest in the country, which is weighing on domestic demand.
"Households are likely to be more cautious in their spending this year due to several uncertainties around the impact of the political turmoil," the World Bank said in the report.
2015 growth was also slashed from 5% to 4.5%.
Economic data
Indian FX reserves data released on Friday by the Reserve Bank of India showed a rise to USD 303.67B from USD 298.64B. Bank loan growth slowed down slightly to 14.3% from 17.7%.
Taiwanese annual inflation picked up at 1.61% in March, compared with the 0.05% drop in February, according to data released on Sunday by National Statistics Taiwan. This result is above consensus of +1% and it is the largest increase in 13 months. Month-on-month CPI rose 0.3%, after growing 0.3%.
Taiwanese Wholesale Prices climbed 0.15%, following a 0.48% drop and below expectations of a 0.34% increase.
Technicals
Last week the strongest gains were registered by the South Korean won and the Taiwanese dollar, while the Indian rupee fell following the biggest quarterly increase since 2012.
On Friday USD/KRW was little changed, sliding by 0.07% to 1054.60. The daily FXStreet Trend Index was slightly bearish, and the OB/OS Index oversold. RSI was neutral at 33 at the last close and has risen to 58 so far today. The 1D 200 SMA was at 1,080.17, while the 1D 20 EMA was at 1,066.45.
USD/IDR dipped by 0.15% to 11300.00. The daily FXStreet Trend Index was slightly bearish, and the OB/OS Index neutral. RSI was neutral at 33 at the last close. The 1D 200 SMA was at 11,373.45, while the 1D 20 EMA was at 11,418.35.
Michael Every, Head of Financial Markets Research, Asia Pacific at Rabobank comments: IDR outperformed all regional currencies in the first three months of the year, including PHP and SGD. Of course, having come such a long way in such a short time (IDR rebounded almost 8% in Q1 alone) it would not be a surprise to see positive momentum moderate ahead.”
“Tellingly, a 30-day relative strength index suggests that IDR is already now moving close to over-bought territory, pointing to room for some profit taking. Nonetheless, we believe that even if this is seen, there are still a series of positive fundamental factors that argue IDR can push even higher towards year-end.”
In case of China, the World Bank suggested however that the reforms announced recently by the country's government should prop up growth in the longer term.
"If implemented, the reforms will have a profound impact on China's land, labour, and capital markets, and enhance the long-term sustainability of its economic growth," the bank assured in the official report.
"Some reforms, including efforts to reduce regulatory and administrative burdens, reform taxation, and make more land available for commercial activities, are also likely to support growth in the short term."
The 2015 forecast of 7.5% was left unchanged.
Thailand's growth outlook reduction on the other hand was carried out on the back of concerns with the ongoing political unrest in the country, which is weighing on domestic demand.
"Households are likely to be more cautious in their spending this year due to several uncertainties around the impact of the political turmoil," the World Bank said in the report.
2015 growth was also slashed from 5% to 4.5%.
Economic data
Indian FX reserves data released on Friday by the Reserve Bank of India showed a rise to USD 303.67B from USD 298.64B. Bank loan growth slowed down slightly to 14.3% from 17.7%.
Taiwanese annual inflation picked up at 1.61% in March, compared with the 0.05% drop in February, according to data released on Sunday by National Statistics Taiwan. This result is above consensus of +1% and it is the largest increase in 13 months. Month-on-month CPI rose 0.3%, after growing 0.3%.
Taiwanese Wholesale Prices climbed 0.15%, following a 0.48% drop and below expectations of a 0.34% increase.
Technicals
Last week the strongest gains were registered by the South Korean won and the Taiwanese dollar, while the Indian rupee fell following the biggest quarterly increase since 2012.
On Friday USD/KRW was little changed, sliding by 0.07% to 1054.60. The daily FXStreet Trend Index was slightly bearish, and the OB/OS Index oversold. RSI was neutral at 33 at the last close and has risen to 58 so far today. The 1D 200 SMA was at 1,080.17, while the 1D 20 EMA was at 1,066.45.
USD/IDR dipped by 0.15% to 11300.00. The daily FXStreet Trend Index was slightly bearish, and the OB/OS Index neutral. RSI was neutral at 33 at the last close. The 1D 200 SMA was at 11,373.45, while the 1D 20 EMA was at 11,418.35.
Michael Every, Head of Financial Markets Research, Asia Pacific at Rabobank comments: IDR outperformed all regional currencies in the first three months of the year, including PHP and SGD. Of course, having come such a long way in such a short time (IDR rebounded almost 8% in Q1 alone) it would not be a surprise to see positive momentum moderate ahead.”
“Tellingly, a 30-day relative strength index suggests that IDR is already now moving close to over-bought territory, pointing to room for some profit taking. Nonetheless, we believe that even if this is seen, there are still a series of positive fundamental factors that argue IDR can push even higher towards year-end.”