Asian FX loses ground on dollar strength; key cenbank decisions awaited

Reuters

Asian FX loses ground on dollar strength; key cenbank decisions awaited

15. Okt. 2024 um 5:15 vorm. GMT

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Thailand, Indonesia, Philippine rate decisions due Wednesday

Philippine stocks up 1.5%, peso hits more than 2-month low

Baht down 0.6%, ringgit hits over 4-week low

By Rajasik Mukherjee and Roushni Nair

Oct 15 (Reuters) -Asian currencies faltered on Tuesday, with the Thai baht and Philippine peso leading the decline, as the U.S. dollar held firm near a two-month peak and investors grew cautious ahead of a slew of key monetary policy decisions due later this week.

The baht THB=TH shed as much as 0.6%, as of 0341 GMT, and was on track for its worst session since Oct. 7. The peso PHP= slid 0.3% to hit a more than two-month low, while Malaysia's ringgit MYR= weakened as much as 0.3% to touch its lowest since Sept. 13.

The dollar index =USD, which gauges the greenback against a basket of six major currencies, hovered just below Monday's peak of 103.36, the highest since Aug. 8, as expectation that the Federal Reserve will implement only modest interest rate cuts in the coming months grew further. USD/

However, Philip Wee, a senior FX Strategist at DBS, said the greenback's appeal should wane from improving risk appetite.

Investors in the region waited for monetary policy decisions on Wednesday from central banks in Thailand, the Philippines, and Indonesia.

"We expect further easing over the coming quarters from BI (Bank Indonesia), but the pace and extent of this may be tempered by occasional bouts of IDR weakness," analysts at ING said in a note, adding that market concerns over the country's budget and spending plans might lead to further volatility.

The Indonesian central bank is widely expected to keep rates unchanged on Wednesday, a Reuters poll found.

The rupiah IDR= traded flat on Wednesday, while stocks in Southeast Asia's largest economy .JKSE rose 0.6%, hitting their highest since Oct. 2 and heading for a third consecutive session of gains.

The Philippine central bank, which lowered its interest rate in August for the first time in nearly four years, is expected to deliver two more cuts this quarter, a Reuters poll showed.

"The central bank cut rates by 25 bps back in August, front-running the Fed. And despite the PHP's recent weakness, it is forecast to cut again in October by 25 bps, matching the Fed's easing overall so far," ING analysts said.

Analysts at Maybank expect the Bank of Thailand to maintain a status quo "given the adamancy of the governor to continue to state that policy settings are neutral."

Among Asian stock markets, Bangkok .SETI and Kuala Lumpur .KLSE traded flat, while Seoul .KS11 inched up 0.3% and Manila .PSI added 1.5%.

HIGHLIGHTS:

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Asian currencies and stocks at 0419 GMT
COUNTRY	FX RIC	FX DAILY %	FX YTD %	INDEX	STOCKS DAILY %	STOCKS YTD %
Japan	JPY=	+0.03	-5.77	.N225	1.32	19.9
China	CNY=CFXS	-0.32	-0.21	.SSEC	-0.52	9.82
India	INR=IN	-0.01	-1.03	.NSEI	0.20	15.86
Indonesia	IDR=	-0.03	-1.06	.JKSE	0.63	4.60
Malaysia	MYR=	-0.30	+6.64	.KLSE	0.17	12.70
Philippines	PHP=	-0.32	-3.92	.PSI	1.47	15.26
S.Korea	KRW=KFTC	-0.21	-5.40	.KS11	0.23	-0.98
Singapore	SGD=	-0.14	+0.69	.STI	0.36	11.38
Taiwan	TWD=TP	-0.04	-4.50	.TWII	1.40	29.93
Thailand	THB=TH	-0.81	+2.26	.SETI	0.35	4.19