Asian currencies held steady on
Monday, with the US dollar slipping, hit by the double whammy
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
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
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
prices, and an increase in migration, demand remains firm, which
is putting pressure on inflation to the upside in Singapore,”
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%
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Asia stock indexes and
currencies at 0637 GMT
COUNTRY FX RIC FX FX INDE STOCK STOCK
DAILY YTD % XSS YTD
% DAILY %
Japan +0.05 -4.91 <.n2>
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>
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;)
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