Asian FX decline on dollar strength; Philippines inflation soars
Asian emerging stocks and currencies were trading lower on
Tuesday, hit by regional inflation, extended U.S. Federal
Reserve rate-hike worries and a firm dollar.
Annual inflation in the Philippines
rose 8.0% in November
from a year earlier, bolstering the case for a
half-percentage point interest rate hike this month.
“Given the elevated inflation, especially rising
pressure from core services inflation, we continue to expect the
BSP (Bangko Sentral ng Pilipinas) to deliver a 50 basis points
hike in its December meeting,” analysts at Goldman Sachs said.
Phillipines’ central bank has raised rates six times this
year to meet its annual inflation target of 2%-4%. Last week,
its governor flagged another 25 bps or 50 bps hike at the Dec.
The peso, which has lost about 9% so far this year,
was flat among broadly lower Asian emerging currencies. Stocks
in Manila soared 2.6%.
The dollar index rose 0.2% to 105.42 after strong
U.S. services data strengthened the greenback and fueled bets
over the Federal Reserve maintaining its higher for longer
stance on further interest rate hikes.
Uncertainty over the Fed’s intentions overshadowed
optimism about China beginning to relax its zero-COVID strategy
and sapped sentiment for risky Asian assets.
Poon Panichpibool, a markets strategist at Krung Thai
Bank, said the U.S. dollar could peak over the
medium-to-long-term, helping Asian currencies outperform the
dollar next year.
South Korea’s won and Indonesia’s rupiah
depreciated 1.8% and 0.7%, respectively, while India’s
rupee fell 0.6%. Malaysia’s ringgit retreated
Thailand’s baht depreciated 0.9%, while stocks
in Bangkok shed 0.4%.
The Singapore dollar appreciated 0.1% – the only
bright spot among Asian emerging currencies.
Equity markets in Asia remained on the backfoot, with stocks
in Jakarta and Mumbai declining 1.4% and 0.4%,
** Indonesian 10-year benchmark yields rise 8.2 basis points
** India’s economy expected to grow 6.9% this year –
** China may announce 10 new COVID easing steps on Weds
** Investors look to emerging markets as planets align for
end of dollar bull market – analysis
The following table shows rates for Asian currencies against the
dollar at 0622 GMT.
Asia stock indexes and currencies at
COUNTRY FX RIC FX FX INDE STOCKS STOCKS
DAILY % YTD % X DAILY YTD %
Japan -0.28 -16.0 <.n2>
India -0.58 -9.65 <.ns ei>
Indonesi -0.74 -8.54 <.jk a se>
Malaysia -0.34 -4.95 <.kl se>
Philippi -0.04 -8.90 <.ps nes i>
Singapor +0.10 -0.57 <.st e i>
Taiwan -0.62 -9.64 <.tw ii>
Thailand -0.90 -4.76 <.se ti>
(Reporting by Upasana Singh in Bengaluru; Editing by Nivedita
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