[achiever]

Political situation in Thailand and Indonesia were in the limelight at the start of the week. If not for the onshore holiday, USD-THB would probably have headed higher as Thai PM Abhisit declaring state of emergency in Pattaya and then Bangkok on Sunday. The latest development also increased concerns that the government may not be able to contain the protesters and restore peace and order. In that event, risk of another military coup will ostensibly rise and herald more political uncertainties ahead, sustaining bid tone in USD-THB.

On the contrary, in Indonesia, news that a quick count of official results of last Thursday’s parliamentary elections showed President SBY’s party winning 20.5% helped push USD-IDR to break below 11,100 briefly. In addition, China’s data releases over the weekend helped improve sentiment for Asian currencies. Economists expect China to lead the global upturn as this is where fiscal and monetary stimulus is more effective.

This week China will release its 1Q09 GDP and economists expect 5.7% growth vs 6.8% in 4Q08 and for this growth rate to be the bottom. In the meantime, USD-RMB has been hovering above 6.83, tracking firmer USD environment. The 12M NDF is projecting a 1.3% appreciation and in the near term, further leftward shifts may require spot to initiate the move lower.

Singapore’s MAS will hold its semi-annual MPC on Tuesday and market consensus is expecting a re-centering of the SGD NEER band. 1Q09 advance estimate GDP and March NODX will be released at the same time. Unlike China, Singapore represents the other end of the Asian economic spectrum where its high export sector vulnerabilities could be reflected via deeper growth contraction in 1Q09. Another round of growth revision for the full year has been signaled by the Prime Minister though he also said that it will not likely reach double-digit contraction. The SGD NEER is currently hovering near 2% below the mid-band with USD-SGD at 1.5165, EUR-USD at 1.314 and USD-JPY at 100.24 and the authorities may stand ready to guard against volatile moves in the interim, but will likely continue to guide the SGD NEER toward the lower half of the band in the medium term.