Most emerging Asian currencies were weighed down on
Monday, with Thailand’s baht leading the laggards in a holiday-thinned trade, as
worries over searing inflation pressures and recession continued to dominate the
Markets in China are closed for the week for National Day and South Korea
was closed on Monday for a public holiday.
Surging inflation and a potential downturn in global economies have weighed
on risk-sensitive Asian assets, prompting a rush to safe-havens assets such as
the U.S. dollar.
Additionally, market participants await U.S. non-farm payrolls later this
week for further ideas on the Federal Reserve’s future course on rate hikes.
The Thai baht slumped 0.8% as higher oil prices added pressure on
the currency, after the Organisation of Petroleum Exporting Countries said its
could cut output by more than a million barrels a day.
“It could be some commodities-related flows again that could contribute to
the unit’s depreciation today,” said Poon Panichpibool, a markets strategist at
Krung Thai Bank.
“Some market players could buy commodities like crude oil and these
commodities-buying flows are usually done in dollar terms so market players have
to buy the greenback and sell the baht.”
Moreover, the Malaysian ringgit dipped 0.1% in its eighth consecutive
session of losses and hit its lowest level since 1998. The country’s central
bank chief, meanwhile, said that the weakening of the currency was not a
reflection of the state of the economy.
The ringgit has lost about 12% against the dollar so far this year.
Elsewhere, the Indonesian rupiah lost 0.5% after South-East Asia’s
largest economy reported a rise in inflation to 5.95%, although it was slightly
less than expected.
“Rising inflation will likely convince Bank Indonesia to stay hawkish with
more rate hikes likely at the Oct. 20 meeting,” analysts at ING wrote.
Inflation prints across Asian economies such as Taiwan, the Philippines and
Thailand this week are likely to dictate the course of their respective central
Other units such as the Philippines peso and the Taiwan dollar
fell about 0.4% each.
Most regional equities also faced risk aversion in a holiday-heavy week,
with Philippine stocks trading about 0.3% lower at around a two-year low.
Other stock markets such as Singapore, Malaysia and Thailand
slipped between 0.4% and 1.3%.
** Indonesian 10-year benchmark yields fall to 7.358%
** GLOBAL ECONOMY-Asia’s factory activity weakens on global slowdown, cost
** Thai c.bank says has acted to curb baht volatility
at 0644 GMT
COUNTRY FX RIC FX FX YTD INDEX STOCKS STOCKS
DAILY % DAILY YTD %
Japan -0.22 -20.67 1.07 -8.95
China – -10.76 – -16.91
India -0.53 -9.10 -0.35 -1.84
Indonesia -0.43 -6.80 -0.22 6.75
Malaysia -0.22 -10.36 -0.21 -11.22
Philippines -0.36 -13.52 -0.28 -19.62
S.Korea – -16.88 – -27.61
Singapore -0.06 -6.03 -0.52 -0.31
Taiwan -0.40 -13.12 -0.92 -27.00
Thailand -0.83 -12.40 -1.28 -5.34
(Reporting by Archishma Iyer in Bengaluru; Editing by Sherry Jacob-Phillips)