Asia FX mixed as markets mull future Fed rate stance

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Emerging Asian currencies were mixed

on Monday and several regional stock markets eased after sharp

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gains in the previous session, as investors weighed the

likelihood of the U.S. Federal Reserve softening its hawkish

monetary policy.

The Indonesian rupiah, Philippine peso and

South Korean won lost between 0.2% and 0.6%, while

the Singapore dollar also inched lower.

The U.S. dollar steadied after Federal Reserve Gov.

Christopher Waller said on Sunday the bank was not softening its

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fight against inflation, which made some investors think that

the steep sell-off last week was probably overdone.

Still, Malaysia’s ringgit outperformed its peers

to rise 0.9%, adding to Friday’s 1.6% surge that came after data

showed the Malaysian economy had expanded at its fastest pace in

more than a year in the third quarter.

Thailand’s baht was also an outlier, gaining 0.4%,

as the Bank of Thailand (BoT) said monetary policy would be

“measured and gradual” to support economic recovery, but that it

was ready to adjust those settings if necessary.

“I do agree on the BoT stance … considering the economy,

which has not fully recovered yet compared to pre-COVID-19

level,” said Kittika Boonsrang, capital markets business

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research specialist at Kasikornbank.

“BOT may not need to rush as the wind is changing its

direction, with rising concern on over-tightening as inflation

is falling back under control.”

Meanwhile, in China, the yuan hit a near

two-month high and stocks jumped 0.8% on the

government’s decision to ease some COVID-19 restrictions and as

regulators outlined an aggressive plan to shore up liquidity in

the property sector.

Regional share markets were mixed, after a rally on Friday

in the aftermath of softer-than-expected U.S. inflation data.

While equities in Singapore and the Philippines

gained over a percent, stocks in Indonesia,

Malaysia and Thailand skidded between 0.4% and

0.9%.

Indonesia’s trade surplus is seen narrowing slightly in

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October to $4.5 billion amid weakening in global trade and

moderating commodity prices, a Reuters poll showed.

HIGHLIGHTS

** India’s Oct inflation seen falling below 7% – central

bank chief

** Indonesian 10-year benchmark yields are down 10.2 basis

points at 7.101%​​

** Singapore’s 10-year benchmark yield is up 2.3 basis

points at 3.376%

Asia stock indexes and currencies

at 0633 GMT

COUNTRY FX RIC FX FX INDEX STOCKS STOCKS

DAILY % YTD % DAILY YTD %

%

Japan -0.38 -17.4 -1.06 -2.88

0

China +0.56 -9.91 -0.08 -15.25

India -0.52 -8.48 -0.07 5.66

Indonesi -0.23 -8.21 -0.65 7.02

a

Malaysia +0.87 -9.18 -0.43 -6.74

Philippi -0.31 -11.1 1.11 -10.76

nes 2

S.Korea -0.57 -10.3 -0.34 -16.89

4

Singapor -0.13 -1.77 1.29 4.68

e

Taiwan +1.16 -10.8 1.19 -22.20

2

Thailand +0.39 -6.65 -0.87 -2.09

​​

(Reporting by Navya Mittal; Editing by Savio D’Souza)