Asian currencies, Philippine stocks drop as traders weigh Trump win implications
Thai baht hits more than 2-month low
Philippine stocks fall as much as 3.4%
Singapore stocks rally 2.3%
Updates at 0721 GMT
By Himanshi Akhand
Nov 7 (Reuters) - China-exposedAsian currencies weakenedon Thursday, while the Philippine stock market slumped over 3% as investors priced in heightened tensions around security and trade in a second term for Donald Trump as U.S. president.
Trump has promised to slap new and potentially hefty tariffs on a wide swath of goods from countries including China and Mexico, while his vice presidential candidate, JD Vance, has proposed a 10% tax on remittances.
The Philippine benchmark index .PSI fell up to 3.4%, accumulating losses of about 4.5% in two sessions. The country is considered particularly sensitive to remittances.
"It appears that markets are pricing in some risk of lower remittance flows and slower domestic consumption in the aftermath of a Trump win," said Shivaan Tandon, markets economist at Capital Economics.
Among currencies, China's yuan CNY=CFXS is trading at a three-month low, while Mexico's peso MXN= has slumped to its lowest level in over two years.
The South Korean won KRW=KFTC fell past 1,400 to its lowest since late 2022.
"The won's weakness is being aggravated by the fact that the structure of South Korea's exports is formed in a way sensitive to China," said Baik Seok-hyun, economist at Shinhan Bank.
Any tariff hikes will also hurt chipmakers in Taiwan, South Korea and other countries that produce for Chinese tech firms.
"Asia, excluding China, has become more dependent on the U.S. as a source of end-demand. A universal tariff would also limit the incremental benefit Asia ex-China receives from supply-chain diversification efforts," Morgan Stanley analysts said in a note.
Still, they said it remained to be seen how quickly the proposed tariffs would be implemented.
These tariffs would likely stoke inflation and, in turn, lift the dollar and slow the Federal Reserve's policy easing -- both of which would suck money out of emerging markets, as the greenback's rally has already done.
The Fed is expected to reduce rates by 25 basis points later in the day but the focus now will squarely be clues for whether or not it will cutrates in December.
Analysts believe that the response from regional central banks would depend on the magnitude of growth downside and the extent of currency depreciation, which could limit their ability to cut rates immediately.
Malaysia's central bank kept its key policy rate unchanged on Wednesday, but warned about potential currency volatility.
The ringgit MYR= was last at its lowest since mid-August.
Among stock markets, Jakarta equities .JKSE slid up to 1% to a near three-month low.
However, stocks in Singapore .STI rallied as much as 2.3% to a 17-year high, led by a 7% jump in DBS Group DBSM.SI after the city-state's biggest bank posted a record quarterly profit.
China stocks .SSEC rose 2.6% on optimism over potential stimulus measures a day ahead of the conclusion of the week-long National People's Congress Standing Committee meeting.
HIGHLIGHTS:
** Philippines GDP yr/yr growth slows to 5.2% in Q3
** China's exports soar past forecast as factories front-run Trump tariff threat
Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
Asian stock markets https://tmsnrt.rs/2zpUAr4
Reporting by Himanshi Akhand in Bengaluru; Additional reporting by Jihoon Lee and Rae Wee; Editing by Subhranshu Sahu and Savio D'Souza
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