Asian currencies tepid after dollar steadies, stocks mixed

Reuters

Asian currencies tepid after dollar steadies, stocks mixed

2024 7월 16 일, 오전 5:06 GMT

<html xmlns="http://www.w3.org/1999/xhtml"><head><title>EMERGING MARKETS-Asian currencies tepid after dollar steadies, stocks mixed</title></head><body>

Indonesia's rupiah, shares slip

Indonesia c.bank to keep interest rate unchanged on Wednesday - poll

Malaysian stocks touch over 3-year high

U.S. dollar recovers from around 5-week low

By Shivangi Lahiri

July 16 (Reuters) -Asian emerging market currencies were subdued on Tuesday and equities were mixed as the dollar steadied, while the Indonesian rupiah and shares slipped ahead of a monetary policy meeting.

The dollar regrouped after comments by Federal Reserve Chair Jerome Powell bolstered September rate cut bets, though it remained around five-week lows.

Markets were also assessing the ramifications of a Donald Trump presidency as worries intensify that his hawkish trade policy, loose fiscal plans, and potential tax incentives could fan inflation and alter the U.S. monetary policy easing path.

Risk-sensitive emerging market currencies have been pressured by a stronger dollar riding on the high interest rate wave, pushing developing countries to raise their borrowing costs to prevent capital outflows which in turn impacts economic growth.

"I expect further U.S. dollar strength against Asian currencies in the lead up to the U.S. election," Alvin Tan, head of Asia FX strategy at RBC Capital Markets, said.

"Trump's promise of higher tariffs against all imports, and particularly from China, is broadly negative for Asian assets and currencies, especially from the region's more export-dependent economies."

The U.S. dollar index =USD was at 104.320 against a basket of major currencies as at 0412 GMT.

The Indonesian rupiah IDR= slipped 0.3% in its second successive day of losses, and equities .JKSE fell 0.5% ahead of Bank Indonesia's (BI) monetary policy meeting on Wednesday. The central bank is widely expected to keep interest rate unchanged.

"Momentum indicators show the (USDIDR) pair is stretched on the downside and so there is a possibility that any lower move is limited whilst there is a chance of a rebound," analysts at Maybank wrote.

BI is "unlikely to make a move we think unless the Fed begins to more clearly start to signal an easing cycle is starting or becoming more entrenched," they added.

Elsewhere, the Malaysian ringgit MYR= and Thailand's baht THB=TH edged lower, while the Singapore dollar SGD= was trading largely flat.

Equities in Malaysia .KLSE rose up to 0.3% to touch a more than three-year high, while stocks in Taiwan .TWII rose as much as 1.2%.

The Philippine benchmark .PSI and South Korean shares .KS11 edged higher as well, while those in Singapore .STI and Indonesia .JKSE lost around 0.3%.

The Chinese yuan CNY=CFXS and Shanghai Composite .SSEC remained under pressure for a second day after a slew of data on Monday showed the world's second-largest economy was faltering.

"The big picture is that the Chinese economy still remains in need of more stimulus, while more importantly, requires meaningful long-term reforms to turn market sentiment around," analysts at MUFG wrote.

HIGHLIGHTS:

** Malaysia not planning to reintroduce goods and services tax, minister says

** Japan keeps up warnings against sharp yen falls

** Thailand gets green light to use 2024/25 budgets for $13.8 bln stimulus scheme

** Temasek aims to invest up to $10 billion in India as China weighs

Asia stock indexes and currencies at 0327 GMT
COUNTRY	FX RIC	FX DAILY %	FX YTD %	INDEX	STOCKS DAILY %	STOCKS YTD %
Japan	JPY=	-0.37	-11.06	.N225	0.22	23.35
China	CNY=CFXS	-0.09	-2.31	.SSEC	-0.30	-0.34
India	INR=IN	+0.00	-0.46	.NSEI	0.00	13.14
Indonesia	IDR=	-0.22	-4.97	.JKSE	-0.32	-0.24
Malaysia	MYR=	-0.11	-1.82	.KLSE	-0.13	11.90
Philippines	PHP=	+0.02	-5.24	.PSI	0.19	3.91
S.Korea	KRW=KFTC	-0.15	-7.02	.KS11	0.24	8.00
Singapore	SGD=	-0.01	-1.84	.STI	-0.27	7.72
Taiwan	TWD=TP	-0.12	-5.75	.TWII	0.60	33.98
Thailand	THB=TH	-0.22	-5.69	.SETI	-0.10	-6.34