Asian FX, stocks tumble on bets of more U.S. rate hikes
Most Asian currencies weakened
against dollar on Monday, as strong U.S. jobs data raised the
chances of further Federal Reserve interest rate hikes, casting
a cloud on global growth.
Unemployment in September fell further, data from the U.S.
showed, which points to a tight labor market, while job growth
“A surprising drop in the unemployment rate and another
solid wage growth have boosted market expectations for a fourth
75bp rise at the November 1-2 FOMC (Federal Open Market
Committee) meeting,” said Gao Qi, a currency strategist at
The Thai baht, which he said was a “high-beta” currency,
tumbled 1.4% to trade at 37.9 to the dollar. The Indonesian
rupiah fell 0.3%, and the Singapore dollar
The greeenback further strengthened after the jobs data,
with the dollar index rising 0.5% late on Friday, and
adding another 0.1% Monday. The index was last seen at 112.861.
However, the Philippine peso held up against the
strong dollar, rising 0.1%, supported by the central bank
governor’s statements late on Friday, when he said the Bangko
Sentral ng Pilipinas was active in the forex market and selling
Malaysia’s prime minister said the parliament was dissolved,
with the dates of a snap election yet to be decided. The ringgit
did not trade on account of a public holiday.
The prospect of further U.S. rate hikes also sent the
country’s benchmark yield 6.1 basis points (bps)
higher to 3.885% on Friday. Asian yields followed suit, with
Indonesia’s 10-year bond yield up 4.6 bps at 7.288%,
while the Singaporean yield pushing 4.7 bps higher
Meanwhile, all major Asian stock markets traded in the red,
with China leading losses, after shedding 1.7%. Markets
in the Philippines also tumbled 1.7%, while those in
Singapore fell 1.3%.
“Returns from safe assets keep rising, making it harder for
equities to maintain their attractiveness,” analysts at DBS
Chinese technology stocks fell sharply after U.S. President
Joe Biden’s administration published a sweeping set of export
controls on Friday, including a measure to cut China off from
certain semiconductor chips made anywhere in the world with U.S.
Markets in China reopened after a weeklong holiday, with
China’s onshore yuan trading about 0.1% higher.
Data showed China’s services activity shrank in September
due to COVID-19 restrictions, the first contraction in four
The Indian rupee hit a record low of 82.6825 to the
dollar before cutting losses after the central bank stepped in
and sold dollars, sources told Reuters. The rupee last traded at
82.39 to the dollar.
Markets in Malaysia, South Korea and Taiwan did not trade on
account of public holidays. Japan’s stock market was closed, but
the yen traded.
** Malaysia on Friday warned of an economic slowdown while
unveiling a smaller budget for the upcoming year
** India fuel demand slips to 10-month low in September
Asia stock indexes and currencies at
COUNTRY FX RIC FX FX YTD INDEX STOCKS STOCKS
DAILY % DAILY YTD %
Japan +0.05 -20.78 – -5.82
China +0.08 -10.68 -1.69 -18.31
India -0.08 -9.77 -0.63 -0.86
Indonesia -0.39 -6.92 -0.68 6.04
Philippines +0.07 -13.57 -1.68 -18.11
Singapore -0.13 -5.98 -1.17 -0.47
Thailand -1.33 -11.81 -0.96 -5.61
(Reporting by Harshita Swaminathan, Additional reporting by
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