Asian currencies, stocks rise ahead of US election, Fed meeting
Malaysia cenbank to keep rates steady on Wed - Reuters poll
S.Korean won gains 0.5%, Singapore dollar strengthens 0.6%
South Korean stocks rise 1.8%, Malaysian stocks up 0.6%
Updates as at 0637 GMT
By John Biju and Ayushman Ojha
Nov 4 (Reuters) -Most Asian currencies rose on Monday, as the dollar skidded at the start of a crucial week dominated by the U.S. presidential election, the Federal Reserve policy meeting, and a slew of inflation reports from Asian economies.
The Philippine peso PHP= strengthened 0.3%, while the South Korean won KRW=KFTC and the Singapore dollar SGD= climbed 0.5% and 0.6%, respectively.
The dollar =USD was down 0.5% as market participants braced for the U.S. election on Tuesday and the Fed's rate decision on Thursday.
Democratic candidate Kamala Harris and Republican Donald Trump remain virtually tied in opinion polls, while a 25-basis-point Fed rate cut has been fully priced in.
"Last week was basically the dollar rallying on greater expectations of a Trump victory. Now, I think as we get closer to the actual event, there's a little bit of rebalancing going on," said Robert Carnell, regional head of research, Asia Pacific, at ING.
Even if Trump wins, which would normally be dollar-positive, the initial response might not be for a dollar rally. Hence, investors are squaring positions, he said.
Meanwhile, MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.6%. Equities in South Korea .KS11 jumped 1.8%, while those in Singapore .STI rose 0.7%.
Investors are also awaiting inflation data from South Korea, the Philippines, Thailand, and Taiwan to gauge the rate outlook.
Last month, the Bank of Korea, Bank of Thailand and Bank Indonesia kicked off their easing cycles, while the Philippine central bank reduced rates by another 25 bps.
Most Asian central banks will ease policies more slowly than the Fed over the coming year as inflation remains broadly within targets and growth is still resilient, a Reuters poll showed.
"A stronger dollar makes local central banks in the Asia region just a little bit more hesitant about easing their own policy rates. They don't want to cut and then just see the benefits of that washed away in a weak currency, which then ends up bringing in more inflation," said Carnell.
The Malaysian central bank is expected to keep rates steady at 3.0% on Wednesday, and hold it there at least through 2025.
Equities in Malaysia .KLSE climbed 0.6%, while the ringgit MYR=, one of the best-performing currencies this year, was up 0.3%.
In China, the Standing Committee of the National People's Congress is meeting from Nov. 4 to 8, with markets widely expecting the approval of more fiscal stimulus measures.
HIGHLIGHTS:
** Japan cuts growth forecast again for current fiscal year on weak exports
** China stocks nudge higher as US election risk looms
** Thailand delays selection of central bank board chairman to next week
Asian stocks and currencies at 0637 GMT | ||||||
COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
Japan | JPY= | +0.65 | -7.19 | .N225 | - | 13.71 |
China | CNY=CFXS | +0.51 | +0.06 | .SSEC | 0.69 | 10.75 |
India | INR=IN | -0.04 | -1.07 | .NSEI | -1.80 | 9.82 |
Indonesia | IDR= | -0.19 | -2.22 | .JKSE | -0.79 | 2.38 |
Malaysia | MYR= | +0.28 | +5.20 | .KLSE | 0.49 | 10.80 |
Philippines | PHP= | +0.29 | -4.98 | .PSI | -0.16 | 10.57 |
S.Korea | KRW=KFTC | +0.54 | -6.05 | .KS11 | 1.83 | -2.50 |
Singapore | SGD= | +0.62 | +0.14 | .STI | 0.70 | 10.49 |
Taiwan | TWD=TP | +0.16 | -3.70 | .TWII | 0.81 | 28.08 |
Thailand | THB=TH | +0.47 | +1.21 | .SETI | 0.00 | 3.42 |
Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
Asian stock markets https://tmsnrt.rs/2zpUAr4
Reporting by John Biju in Bengaluru; Editing by Varun H K and Subhranshu Sahu
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