Tuesday, October 19

Thai baht leads Asian FX lower ahead of c.bank decision


Article content

South Korean and Japanese stocks tumbled

2% on Wednesday, leading falls in the region, while the Thai

baht led currencies lower ahead of a central bank meeting later

in the day.

Financial markets were also nervous about the broader impact

of electricity shortages in China which have disrupted factories

owned by suppliers to global companies such as Apple

and Tesla.

The baht fell as much as 0.4%, hovering at its

weakest since July 2017. It is emerging Asia’s worst performing

currency in 2021, having weakened over 11% against the dollar.

Advertisement

Article content

The Bank of Thailand is widely expected to hold its key

interest rate at a record low, as the tourism-reliant economy

has been hammered by border restrictions due to a COVID-19

outbreak in July and August.

Thailand’s finance minister said on Wednesday that monetary

policy needed to be kept accommodative.

“But this will be a close call that reflects a deliberated

abstinence from further easing amid THB stability risks, and not

an unqualified absence of motivations to cut or effect further

stimulus ”Mizuho Bank analysts said in a note.

“With THB depreciation risks particularly accentuated, a

rate cut at this point may disproportionately compromise THB in

comparison to realizable economic support, ”they added.

Advertisement

Article content

Comments https://www.reuters.com/business/finance/exclusive-feds-bullard-more-aggressive-fed-stance-best-ensure-longer-expansion-2021-09-28

from St. Louis Fed President James Bullard that he could see a

case for two rate hikes next year was also fueling the dour

mood.

Among equity markets, the South Korean benchmark hit

its lowest since the end of March, while the won

weakened for the seventh straight session as the dollar was near

its strongest level for the year as traders braced for tapering.

China’s power squeeze from a shortage of coal supplies has

shut factories across the country and will likely hamper its

2021 growth. This could have a knock-on effect on emerging Asian

economies which count China as their biggest trading partner.

Advertisement

Article content

“The issue may be prolonged as the upcoming winter season

may drive more demand for coal and natural gas, while tighter

regulations are unlikely to be rolled back, ”said Yeap Jun

Rong, a market strategist at IG.

HIGHLIGHTS:

**Singapore’s 5-year benchmark yield is up 1 basis point at

0.929%​​

**Malaysia’s 3-year benchmark yield is up 0.3 basis point at

2.535%​​

**Indonesian 3-year benchmark yields are down 0.5 basis

point at 4.58%

Asia stock indexes and currencies at 0407 GMT

COUNTRY FX RIC FX DAILY% FX YTD% INDEX STOCKS DAILY% STOCKS YTD%

Japan +0.03 -7.38 -2.49 7.26

China -0.12 +0.94 -1.79 1.86

India +0.00 -1.32 -0.53 26.27

Indonesia -0.24 -1.85 0.22 2.47

Malaysia -0.08 -3.91 -0.42 -5.34

Philippines +0.15 -5.89 -0.35 -3.90

S.Korea -0.06 -8.35 -1.98 5.67

Singapore +0.03 -2.68 0.07 8.30

Taiwan -0.12 +2.39 -1.80 14.52

Thailand -0.35 -11.57 -0.22 11.29

(Reporting by Arundhati Dutta in Bengaluru; Editing by

Jacqueline Wong)

Advertisement

In-depth reporting on the innovation economy from The Logic, brought to you in partnership with the Financial Post.

    Comments

    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.



    financialpost.com

    Leave a Reply

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