Asian currencies tepid; stocks higher on US rate cut bets
S.Korean stocks jump 1.2%
Singapore stocks 1% higher
Ringgit flat after Thursday's rate decision
By Ayushman Ojha
May 10 (Reuters) -Most Asian currencies were heading for weekly declines on Friday, although largely unchanged, while stocks were higher on optimism about U.S. rate cuts stirred by fresh signs of a cooling labour market.
Regional forex markets lost the ground they gained last week when the dollar weakened from the U.S. Federal Reserve's dovish shift following softer-than-expected jobs data for April.
The Philippine peso PHP= inched up 0.1%, but was on course for a weekly decline of 0.3%, having gained nearly 1% last week.
The South Korean won KRW=KFTC gained 0.1%, but was on track for a weekly fall of 0.5% after two weeks of gains.
The Malaysian ringgit MYR= was largely flat this week, as it pared last week's climb of 0.6%. The central bank kept its interest rate unchanged on Thursday, saying the ringgit's weak performance did not reflect economic fundamentals.
Although the ringgit has stabilised over the past month from earlier hovering around its 20-year lows, but is still down 3.1% this year.
"We reckon that Bank Negara Malaysia likely drew some comfort from the Malaysian ringgit’s regional outperformance over the past month, despite external-driven volatility," analysts at DBS Bank said, referring to the central bank.
Among other currencies, the Singapore dollar SGD= lost 0.1%, set for its worst week since early April with a fall of 0.3%. It rose 1% in the prior week.
The Taiwanese dollar TWD=TP was slightly lower on Friday but was poised for a fourth consecutive weekly fall.
Stocks in the region were higher after Thursday's data showed greater than expected U.S. initial claims for state unemployment benefits for the week ended May 4, reinforcing prospects for rate cuts after the Fed's dovish tilt last week.
Traders are now pricing in two rate cuts of 25 basis points this year versus one before the payrolls data.
South Korean stocks .KS11 led the gains in emerging Asian equities with a jump of 1.2%, while Singapore stocks .STI rose as much as 1%.
Stocks in Taiwan .TWII gained 0.7%, while Manila shares .PSI were up 0.9%.
Malaysian stocks .KLSE were largely unchanged, while equities in Thailand .SETI inched down 0.2%, bucking the regional trend.
Financial markets in Indonesia were closed for a public holiday.
HIGHLIGHTS:
** India's 2023/24 fiscal deficit seen slightly better than projected, source says
** Malaysia's March industrial production up 2.4%, below forecast
** Japan's consumer spending extends declines as outlook weakens
Asia stock indexes and currencies at 0459 GMT | ||||||
COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
Japan | JPY= | -0.13 | -9.39 | .N225 | 0.39 | 14.22 |
China | CNY=CFXS | -0.05 | -1.76 | .SSEC | -0.22 | 5.79 |
India | INR=IN | +0.02 | -0.33 | .NSEI | 0.69 | 1.74 |
Indonesia | IDR= | - | -4.02 | .JKSE | - | -2.53 |
Malaysia | MYR= | +0.04 | -3.09 | .KLSE | -0.04 | 10.03 |
Philippines | PHP= | +0.14 | -3.34 | .PSI | 0.41 | 1.85 |
S.Korea | KRW=KFTC | +0.09 | -5.90 | .KS11 | 0.61 | 2.77 |
Singapore | SGD= | -0.08 | -2.53 | .STI | 0.82 | 1.62 |
Taiwan | TWD=TP | -0.01 | -5.32 | .TWII | 0.61 | 15.36 |
Thailand | THB=TH | -0.02 | -7.00 | .SETI | -0.09 | -3.37 |
Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
Asian stock markets https://tmsnrt.rs/2zpUAr4
Reporting by Ayushman Ojha in Bengaluru
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