Indonesian rupiah leads Asian currencies higher ahead of U.S. CPI data
Indonesia’s rupiah led gains among
emerging Asian currencies on Thursday, ahead of U.S. inflation
data that could determine the pace of the Federal Reserve’s rate
The rupiah strengthened as much as 0.9% to its
highest level in over three months, a day after the country’s
government said it was reviewing a regulation requiring
exporters of natural resources to keep earnings in a special
account at domestic banks.
The regulation on export earnings has been in place since
2019 as a measure intended to stabilize the rupiah exchange
Other regional currencies also firmed, with the South Korean
won and the Malaysian ringgit both advancing
“Emerging currencies are consolidating before U.S. CPI
tonight, so risk positions are more limited in the near term,”
said Chang Wei Liang, FX and credit strategist at DBS Bank.
The U.S. dollar was steady ahead of the closely watched U.S.
inflation data out today, which will provide more clarity on how
much inflation in the world’s largest economy has tamed and on
the Federal Reserve’s rate increases.
“Expectations are for U.S. inflation print to come in lower
and demonstrate that inflation could be peaking, building the
case for the Fed to downshift rate hikes and provide a little
bit of impetus for Asian currency strength against the dollar,”
Thailand’s baht appreciated 0.2%. Thai consumer
confidence rose for a seventh straight month in December,
reaching a 25-month high, boosted by improved economic activity
and higher foreign tourist arrivals.
Meanwhile, the Philippines’ central bank governor said the
likelihood of cutting reserve requirements for banks in the
first half of year is quite high.
The reserve requirement ratio for banks will be reduced when
the central bank is no longer under pressure to raise benchmark
rates, Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla
told ANC news channel.
The peso weakened 0.2%, while stocks in Manila
China’s annual consumer inflation rate accelerated in
December, driven by rising food prices even as domestic demand
wavered amid restrained economic activity during the month.
The yuan rose 0.1% and hovered at a five-month
high, while stocks in Shanghai fell 0.2%.
Equities in the region were mixed. Stocks in Jakarta
rose 1%, while those in Thailand and Singapore
Meanwhile, Japan’s yen firmed 0.6% after reports that
the Bank of Japan would review the side effects of its monetary
easing at next week’s policy meetings and may take additional
steps to correct distortions in the yield curve.
** The Bank of Korea will raise interest rates by another
quarter percentage point on Friday, a Reuters poll says
** India’s inflation data due later today
** The Brazilian real gained 0.5% on Wednesday after
a volatile start to the week as supporters of far-right former
President Jair Bolsonaro stormed the seats of power in Brasilia
Asia stock indexes and currencies
at 0419 GMT
COUNTRY FX RIC FX FX INDE STOCKS STOCKS
DAILY % YTD % X DAILY YTD %
Japan +0.61 -0.43 <.n2>
India -0.12 +1.28 <.ns ei>
Indonesi +0.78 +1.33 <.jk a se>
Malaysia +0.08 +0.79 <.kl se>
Philippi -0.22 +0.96 <.ps nes i>
Singapor +0.02 +0.73 <.st e i>
Taiwan +0.07 +0.96 <.tw ii>
Thailand +0.16 +3.66 <.se ti>
(Reporting by Himanshi Akhand in Bengaluru)
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