Asian currencies rise, stocks mixed as focus on U.S. CPI data

Article content

Indonesia’s rupiah led emerging Asian

currencies higher on Wednesday, while equities in the region

Article content

were mixed, as investors awaited this week’s U.S. inflation data

for possible clues on the Federal Reserve’s monetary policy

tightening.

The rupiah firmed 0.5%, while the Singaporean dollar

and the Indian rupee firmed 0.1%.

The positive sentiment around Asian currencies, which have

benefitted from the dollar weakening and China’s borders

reopening, has not changed, said Mitul Kotecha, head of emerging

Article content

markets strategy at TD Securities.

“But they continue to fight against continually hawkish

rhetoric from the Fed.”

Fed Chair Jerome Powell did not give any policy clues during

a panel discussion in Stockholm overnight. Markets have been

hoping that the Fed could soon signal an end to its rate hike

cycle, following recent signs of a slowdown in the U.S. economy.

Investor attention is now on the U.S. consumer price index

data, due on Thursday.

“Another deceleration in price pressures would add to

speculations that the Fed could again cut back on its pace of

hike to 25 basis points (bps). This can support risk sentiment

while the USD could come under renewed pressure,” OCBC analysts

said in a note.

Optimism around China’s re-opening has lifted Asian

Article content

currencies against the dollar, with the Thai baht

rising 3.4% since the start of the year and outperforming all

regional peers.

“We are likely to see continuous improvement in its

(Thailand’s) services exports and consequently a stronger THB

this year,” analysts at UOB wrote.

China’s yuan, which has jumped roughly 1.8%

against the dollar so far this year, was up 0.1%.

Equities in the region were mixed. Stocks in Thailand

and the Philippines retreated 0.3% and 0.5%,

respectively, while those in Singapore advanced 0.3%.

Stocks in Jakarta pared some losses after falling as

much as 1% earlier in the session to touch their lowest level

since May. Indonesian equities, which rose about 4% in 2022,

have reversed most of their gains so far this year.

Article content

“The sell-off has mostly happened on big banks and other

stocks, which saw heavy flows from foreign investors last year,”

said Fakhrul Fulvian, an economist at Trimegah Securities.

Indonesia’s relative outperformance last year, which

resulted in expensive valuations, and China’s reopening now have

led to a global fund rebalancing, he added.

HIGHLIGHTS

** Top losers on the Jakarta stock index include

Garda Tujuh Buana Tbk PT and Sunson Textile

Manufacturer Tbk PT

** Malaysia’s industrial production in November rose 4.8%

from a year earlier, above expectations

** Brazil’s real rose 1% on Tuesday after a day of

volatility driven by uncertainty as supporters of far-right

former President Jair Bolsonaro stormed the capital

Asia stock indexes and currencies

at 0648 GMT

COUNTRY FX RIC FX FX INDE STOCKS STOCKS

DAILY % YTD % X DAILY YTD %

%

Japan -0.05 -0.91 <.n2>

China EC>

India +0.09 +1.24 <.ns ei>

Indonesi +0.52 +0.48 <.jk a se>

Malaysia +0.01 +0.69 <.kl se>

Philippi -0.15 +1.47 <.ps nes i>

S.Korea 11>

Singapor +0.08 +0.73 <.st e i>

Taiwan +0.08 +0.88 <.tw ii>

Thailand +0.01 +3.44 <.se ti>

(Reporting by Himanshi Akhand in Bengaluru; Editing by Janane

Venkatraman)