Emerging Asian currencies rose on
Wednesday against the U.S. dollar, which dipped as investors
turned cautious ahead of comments from the U.S. Federal Reserve
Chair Jerome Powell later this session and the crucial U.S.
monthly jobs report on Friday.
The Malaysian ringgit, South Korean won and Thai baht all
traded higher, as investors also braced for a rate decision from
the Bank of Thailand.
The gains in riskier emerging market assets came even as
Chinese data showed factory activity in the world’s
second-largest economy contracted at a faster pace in November.
The U.S. dollar index, which measures the greenback
against a basket of major currencies, eased 0.13% to 106.72.
“There’s room for the dollar to ease a little bit, but I
think fundamentally there’s still a bit of uncertainty going
into 2023,” said Galvin Chia, emerging markets strategist for
Emerging markets have been sensitive to the U.S. rates
outlook, as the Federal Reserve’s aggressive monetary tightening
this year has buoyed the dollar, putting pressure on local
Many central banks in emerging Asia have sought to keep in
step with U.S. rate hikes to limit the risk of capital outflows.
Against this backdrop, Chia expected the Federal Open Market
Committee meeting and the U.S. November CPI print scheduled for
mid-December to be closely watched.
In Asia, the Malaysian ringgit led gains,
appreciating 0.8% and was on track for its best month since
March 2016. It has risen by more than 2% since Malaysia’s Anwar
Ibrahim was sworn in as prime minister last week, but is still
down than 6.5% so far this year.
South Korea’s won rose 0.7% and was on track for
its biggest monthly gain since March 2016.
Thailand’s baht rose 0.3% and stocks gained
0.1% ahead of the Bank of Thailand’s rate decision. Analysts in
a Reuters poll are widely expecting a modest 25-basis-point
Chia said recent gains in the baht reflects optimism about
Thailand’s economic recovery which has lagged some of its peers.
“The Thai baht has been one way to express (the) reopening
dynamics and economic catch-up in the Southeast Asian region,
particularly when it comes to things like tourism.”
Thailand’s economy may not reach a forecast growth of 3.8%
next year due to a global economic slowdown, but this year’s
growth outlook of 3.4% should still be achieved, said the
country’s finance minister on Tuesday.
The Indonesian rupiah firmed 0.1%, ending a three-day
losing streak, while stocks added 0.1%. The currency has
lost 0.95% so far this month.
Indonesia’s central bank governor Perry Warjiyo said on
Wednesday that energy subsidies next year will allow Bank
Indonesia (BI) to raise interest rates in a measured way.
Across the region, stocks were mixed: India surged
0.1%, with Taiwan and South Korea advancing 0.8%
and 0.9%, respectively, whereas Singapore lost 0.2%.
** Indonesian 10-year benchmark yields almost flat at 6.983%
** Thai factory output unexpectedly falls 3.71% y/y in Oct
** Philippines central bank sees November inflation at
** Markets in the Philippines are closed for a public
Asia stock indexes and currencies at 0428 GMT
COUNTRY FX RIC FX FX YTD INDEX STOCKS STOCKS
DAILY % % DAILY YTD %
Japan +0.07 -16.96 -0.46 -3.10
India +0.11 -8.94 0.14 7.44
Indonesi +0.06 -9.41 0.53 7.11
Malaysia +0.69 -6.93 -0.02 -3.95
Philippi – -9.85 – -4.80
Singapor +0.22 -1.59 -0.16 4.72
Taiwan +0.22 -10.39 0.77 -18.64
Thailand +0.41 -5.46 0.25 -1.76
(Reporting by Roushni Nair in Bengaluru; Editing by Ana
Nicolaci da Costa)