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Asian currencies struggled to make headway
on Thursday as the US dollar remained strong on easing
geopolitical tensions and hawkish Federal Reserve officials who
suggested more upcoming rate hikes even at the risk of
recession.
Regional equities were mixed, with benchmarks in Malaysia
Thailand, South Korea and China
advancing as much as 0.7%, while shares in the Philippines
Taiwan, and Indonesia slipped up to
0.5%.
The US dollar index, which measures the greenback
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against a basket of six currencies, was steady in early trade at
106.380, a half-percent appreciation this month so far as
investors absorbed potential future rate hikes.
Treasury yields slipped from two-week highs, with yields on
the 10-year note at 2.7191% on strong factory orders
data, with an eye on non-farm payrolls set to be released on
Friday which would partly determine the magnitude of Fed’s
tightening.
Regional bond yields were flat-to-low, with returns on
high-yield notes: India and Indonesia at
7.216% and 7.223%, respectively.
The Indian rupee fell 0.3% on a widening trade
deficit and global flows into the safe-haven dollar. The
currency, down around 7% so far, is expected to trade near its
historic lows in the coming quarter, a Reuters poll showed.
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The Reserve Bank of India (RBI) is expected to hike its repo
rate on Friday, although analysts are split on the size of the
hike. Tightening of borrowing costs is expected to provide some
stability to the wobbly currency.
In Thailand, the baht appreciated marginally as
investors await central bank meeting next week when the
tourism-reliant country is expected to hop on the policy
tightening bandwagon.
“Signs of resilience in macro outcomes could help buffer
Thai baht from further bouts of deterioration in sentiment, even
as the pace of recovery could be crimped by uncertainties over
timing in return of Chinese tourists,” analysts at Maybank said
in a note.
They expect the currency, which is among the worst hit so
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far this year, to find support at 37.0 per dollar level, with
resistance at 36.0 level.
HIGHLIGHTS:
** Indonesian 5-year yields edge higher to 6.516%
** DBS Q2 profit tops estimates as banks benefit from rising
interest rates
** FX markets haven’t seen last of dollar strength yet –
analysts – Reuters poll
Asia stock
indexes and
currencies
at 0404 GMT
COUNTRY FX FX FX INDEX STOCKS STOCKS
RIC DAILY YTD % DAILY % YTD %
%
Japan +0.08 -13.96 0.50 -3.16
China +0.07 -5.92 0.15 -12.95
India -0.39 -6.47 0.43 0.63
Indonesia -0.13 -4.55 0.28 7.36
Malaysia +0.07 -6.47 0.62 -2.45
Philippines -0.05 -8.51 0.12 -9.62
S.Korea -0.08 -9.36 0.26 -17.12
Singapore +0.01 -2.26 0.22 4.34
Taiwan -0.09 -7.80 -1.38 -20.01
Thailand +0.03 -7.78 0.42 -3.39
(Reporting by Sameer Manekar in Bengaluru; Editing by Sam
Holmes)
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