Monday, May 29

Asian FX struggle for direction as traders eye US debt ceiling talks

Article content

Asian currencies held steady on

Monday, with the US dollar slipping, hit by the double whammy

Article content

of stalled debt ceiling talks and the Fed chief’s unexpected

dovish comments over future interest rate hikes.

The Philippines peso and Thai baht each

depreciated 0.2%, while the Malaysian ringgit and

Singapore dollar remained unchanged.

On the other hand, the South Korean won gained

For a fourth straight session, appreciating 0.7%, while the

Indonesian rupiah rose 0.2% after falling about 0.4% in

Advertisement 2

Article content

the previous session.

Additionally, the yuan gave up early gains and

was trading 0.1% lower as China kept its benchmark lending rates

unchanged for the ninth month in May, matching market


Goldman Sachs analysts revised their yuan forecasts down,

saying a lack of confidence in China’s economy was the biggest

risk to the country’s recovery outlook for the second half.

“We expect pressure (on yuan) to intensify as external

demand slows. Taken together with weaker activity data in April,

the authorities may want to maintain a slightly weaker

short-term CNY bias to help provide some stimulus, said analysts

at TD Securities.

US President Joe Biden and House Republican Speaker Kevin

McCarthy are expected to meet later in the day to discuss the

Article content

Advertisement 3

Article content

debt ceiling – the limit on the amount of money the US

government can borrow to fund its services.

A failure to lift the debt ceiling would trigger a default,

likely sparking chaos in markets and a spike in interest rates.

“Given the debt ceiling focus, it will be a tough week

across the board. As a result, emerging currencies will be

sensitive to any volatility this week,” said Josh Gilbert, a

market analyst with e-Toro.

In Asia, Singapore is expected to release its Consumer Price

Index (CPI) inflation and industrial production figures for

April and final first-quarter GDP growth figures later in the


“CPI is expected to rise to 5.8% year-over-year, up from

5.5% in March. With a tight labor market, rising housing

Advertisement 4

Article content

prices, and an increase in migration, demand remains firm, which

is putting pressure on inflation to the upside in Singapore,”

said Gilbert.

In Thailand, the unemployment rate hit a three-year low in

the first quarter, as recovery in the critical tourism industry


Asian equities, on the other hand, edged higher, with stocks

in Indonesia rising 0.4%, while shares in Thailand

India and China gaining between 0.2%

and 0.5%.


** China fails Micron’s products in security review, bars

some purchases

** Vietnam economy to face continued unfavorable external

conditions – deputy PM

** Modi, Blinken meet Pacific Island leaders in Papua New


Asia stock indexes and

currencies at 0637 GMT





Japan +0.05 -4.91 <.n2>

China EC>

India -0.16 -0.08 <.ns ei>

Indonesia +0.24 +4.57 <.jk ia se>

Malaysia -0.09 -3.08 <.kl a se>

Philipp -0.20 -0.14 <.ps ines i>

S.Korea 11>

Singapore +0.00 -0.35 <.st re i>

Taiwan +0.04 +0.12 <.tw ii>

Thailand -0.23 +0.36 <.se d ti>

(Reporting by Jaskiran Singh in Bengaluru;)


Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

Join the Conversation

Leave a Reply

Your email address will not be published. Required fields are marked *