Asian FX weak on Fed rate-cut outlook; Indonesian rupiah leads losses
Rupiah clocks worst session in 2 weeks
Taiwan dollar logs biggest percentage loss in 1 month
Asian equities mixed; Taipei stocks top laggard
By Roushni Nair and Rajasik Mukherjee
Sept 9 (Reuters) -Asian currencies fell on Monday, with the Indonesian rupiah leading losses, as investors hesitated to make riskier bets ahead of a key U.S. inflation reading later in the week.
The Indonesian rupiah IDR= dipped as much as 0.7% by 0346 GMT to mark its biggest intra-day percentage decline since Aug. 27. The Malaysian ringgit MYR= and the Taiwanese dollar TWD=TP followed suit to lose as much as 0.5% each.
Investors analysed last week's mixed U.S. jobs data and comments from U.S. Federal Reserve officials,which suggested a weak labor market but without sufficient justification for a 50-basis-point interest rate cut. The U.S. inflation report on Wednesday will be a key indicator that could shift market expectations.
The U.S. dollar index USD=, which tracks the currency's value against six major peers, rose marginally by 0.2% to 101.267. The broad MSCI emerging markets currency index .MIEM00000CUS was down as much as 0.3%, heading for its worst session in over two weeks.
Fakhrul Fulvian, an economist at Trimegah Securities, said Indonesia's rupiah was under pressure from overly ambitious U.S. rate cut expectations but said expectations of lower issuance of rupiah securities by Bank Indonesia was likely to normalise the currency market.
Equities in the region traded mixed, with those in Taipei .TWII and Seoul .KS11 down 1.8% and 0.8%, respectively, while shares in Manila .PSI and Singapore .STI advanced over 0.8%, each. Shares in Jakarta .JKSE slipped 0.7% and Thailand .SETI fell 0.3%.
Taiwan and South Korea's economies are closely tied to the U.S. through significant foreign investment and strong trade ties, making them vulnerable to changes in U.S. monetary policy, which has a direct impact on their stock markets.
Thailand's shares surged over 5% last week, extending a four-week rally, driven by improving sentiment as political instability fades and optimism grows over the incoming Vayupak Fund, a state investment fund expected to boost capital inflows.
In Malaysia, stocks .KLSE traded flat, although, 99 Speed Mart Retail IPO-99SP.KL opened higher in its stock market debut after the mini-market chain retailer raised 2.36 billion ringgit ($543 million) in the country's biggest listing in seven years.
In China, investors are growing cautious as inflation in Southeast Asia's largest trading partner accelerates to a six-month high, adding to pressure on the government to implement more policies to address a sluggish economy, housing downturn, joblessness, debt woes, and rising trade tensions.
Shares in Shanghai .SSEC slipped nearly 1%, while the yuan CNY=CFXS slid 0.1%.
($1 = 4.3450 ringgit)
HIGHLIGHTS:
** Indonesian 10-year benchmark yields rise 3.3 basis points to 6.89%
** Japan's Q2 GDP growth revised down; softer consumption to test BOJ policy
Asia stock indexes and currencies at 0432 GMT | ||||||
COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
Japan | JPY= | -0.34 | -1.19 | .N225 | -1.30 | 7.94 |
China | CNY=CFXS | -0.12 | -0.15 | .SSEC | -0.92 | -7.88 |
India | INR=IN | +0.00 | -0.88 | .NSEI | -0.04 | 14.31 |
Indonesia | IDR= | -0.49 | -0.26 | .JKSE | -0.77 | 5.35 |
Malaysia | MYR= | -0.39 | +5.64 | .KLSE | 0.08 | 13.73 |
Philippines | PHP= | -0.20 | -1.59 | .PSI | 0.82 | 8.41 |
S.Korea | KRW=KFTC | +0.01 | -3.86 | .KS11 | -0.47 | -4.63 |
Singapore | SGD= | -0.01 | +1.27 | .STI | 0.90 | 7.56 |
Taiwan | TWD=TP | -0.48 | -4.19 | .TWII | -1.51 | 17.73 |
Thailand | THB=TH | -0.19 | +1.14 | .SETI | -0.27 | 0.56 |
Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
Asian stock markets https://tmsnrt.rs/2zpUAr4
Reporting by Roushni Nair and Rajasik Mukherjee in Bengaluru; Editing by Lincoln Feast.
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
