Asian currencies edged up against a
slightly softer US dollar on Tuesday, with the South Korean
won ticking up after robust second-quarter economic data, but
caution persisted as markets braced for a steep rate hike from
the US Federal Reserve.
The Philippine peso and the Thai baht
strengthened 0.1% and 0.2%, respectively, while the Malaysian
ringgit dipped 0.1%.
The won rose 0.3% after data showed South Korea’s
economic growth unexpectedly picked up in the second quarter, as
consumption rebounded after COVID-19 curbs eased. That supported
the case for more rate hikes by the central bank.
The Bank of Korea estimated that gross domestic product for
the April-June period had been 0.7% higher than in the previous
quarter. The GDP grew faster than the 0.4% rise tipped in a
Reuters survey and the 0.6% recorded for the first quarter.
Stocks rose 0.4%.
ANZ economist Krystal Tan, however, warned that growth
momentum would be difficult to sustain, as “weak export
prospects, high domestic inflation and rising interest rates all
point to intensifying headwinds.”
Investors in the region now await a likely 75 basis point
rate increase from the Fed this week, with markets pricing in a
chance of about 10% for a larger hike.
“The wait-and-see sentiments in the lead-up to the Fed
meeting this week may drive some paring down of risk positions,”
said Yeap Jun Rong, market strategist at IG in Singapore.
Stocks in Kuala Lumpur, Mumbai, and Bangkok
declined between 0.2% and 0.8%.
Stocks in Shanghai, however, rebounded as real
estate developers continued to rise on news that Beijing was
planning to set up a fund to aid the troubled industry. But
lingering concerns over elevated domestic COVID-19 cases weighed
on the yuan, which traded flat.
Markets are also eyeing preliminary data for Taiwan’s GDP.
Economists estimate it expanded at a slightly slower pace in the
second quarter, hit by COVID-19 lockdowns in top export market
China and a surge in domestic infections.
Taiwanese stocks were down 0.9%, a day after China
delivered sterner warnings to US officials about House Speaker
Nancy Pelosi’s possible visit to Taiwan.
On Monday, official data showed that Singapore’s key
consumer price gauge had risen at its fastest pace in more than
13 years, increasing pressure on the central bank to consider
further policy tightening.
Singapore’s dollar was up 0.1%, and stocks
In Thailand, the finance ministry maintained its 2022
economic growth forecast at 3.5%, underpinned by improved
tourism and exports.
Shares in Thai Life Insurance Plc (TLI), which has
Southeast Asia’s largest initial public offering so conducted
far this year, were down 3.1%.
** Malaysia warns of weaker Q3 palm oil price as Indonesia
scraps export levy
** Philippines’ Marcos lays out ambitious policy agenda with
farm sector in focus
** Indonesia c.bank says to ensure QE-era bond sales do not
** Singapore industrial production for June up 2.2%
Asia stock indexes and currencies at 0602 GMT
COUNTRY FX RIC FX FX FX YTD INDEX STOCK STOCKS
DAILY % S YTD %
Japan -0.01 -15.80 -0.23 -4.01
China -0.03 -5.91 0.59 -10.17
India -0.06 -6.83 -0.77 -4.91
Indonesia +0.00 -4.97 0.28 4.50
Malaysia -0.09 -6.53 -0.48 -6.72
Philippines +0.14 -8.46 0.17 -12.67
S.Korea +0.32 -9.22 0.42 -18.93
Singapore +0.07 -2.61 0.26 2.08
Taiwan -0.04 -7.45 -0.87 -18.73
Thailand +0.18 -8.82 -0.22 -6.07
(Reporting by Harish Sridharan in Bengaluru; editing by