Philippine peso gains on weaker USD, c.bank policy tightening
The Philippine peso notched its first
gain in four days against the U.S. dollar on Friday, helped by a
weaker U.S. currency and a central bank rate increase that
matched the Federal Reserve.
The peso rose 0.2%, recouping some of this week’s
losses. Stocks in Manila inched up for the second
straight day and were on track for their best week in three.
The dollar eased 0.1% as investors continued to
wrangle with recent inflation and retail sales data and its
impact on future Fed policy.
On Thursday, central bank Bangko Sentral ng Pilipinas (BSP)
raised its key policy rate by 75 basis points and
signaled more rate hikes ahead.
“The Fed also looks set to shift to smaller pace of hikes,
which possibly puts less weakening pressures on the PHP against
the USD, and reduces the need for outsized BSP hikes to maintain
reasonable positive interest rate differential,” DBS analysts
said in a note.
The peso has shed 11% of its value so far this year and is
among the worst performing emerging Asian currencies.
Bank Indonesia (BI) also hiked rates by 50 basis points
(bps) on Thursday, as widely expected. The bank’s governor on
Friday forecast inflation to cool further this month, which may
signal a potential slow down in the pace of future rate
Stock markets in Jakarta rose 0.4%. The rupiah
, which has depreciated more than 9% this year, traded
lower for the fifth straight session following last Friday’s
more than 1% surge.
“Overall, Indonesian economic fundamental conditions remain
supportive to create appreciation on Indonesian rupiah,” Maybank
analysts said, adding that there was room for BI to hike by at
least 25 bps in December if the rupiah weakened further.
Regional stock markets were bereft of sharp moves at the end
of a week dominated by U.S. economic data, signals from the Fed
on future policy, and China easing some COVID-19 curbs.
“China easing COVID restrictions attracted short-term equity
investment flows to Asia. Still, the market wants to see China
remove all zero-COVID policies and provide more growth support,”
said Stephen Innes, managing partner at SPI Asset Management.
The yuan bounced slightly after shedding 1.5%
over the last two sessions as it gained 0.4%. Chinese stocks
were roughly flat, but on track to gain for the third
** Singapore’s 10-year benchmark yield is up 5 basis points
** Inflation data from Singapore, Malaysia due next week
** Thailand awaits Q3 GDP and central bank policy decision
Asia stock indexes and currencies at
COUNTRY FX RIC FX FX YTD INDEX STOCKS STOCKS
DAILY % % DAILY YTD %
Japan +0.21 -17.74 -0.09 -3.08
China +0.40 -10.82 -0.11 -14.50
India -0.01 -8.97 -0.26 5.43
Indonesia -0.19 -9.18 0.54 7.62
Malaysia +0.00 -8.48 0.06 -7.54
Philippin +0.19 -11.06 0.32 -9.81
S.Korea -0.09 -11.30 0.25 -17.75
Singapore +0.03 -1.81 -0.33 4.85
Taiwan -0.03 -11.16 -0.27 -20.44
Thailand -0.10 -6.85 0.03 -2.55
(Reporting by Navya Mittal
Editing by Miral Fahmy)
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