Asian currencies fall on firm dollar, stocks lower
S. Korean won weakens 0.4%
Singapore stocks fall 1%
Malaysia rate decision due on Thursday
By Ayushman Ojha
May 8 (Reuters) -Asian currencies were weaker on Wednesday against the firm greenback, while stocks in the region halted their bullish run as investors took cautious approach on the U.S.rate cut path, after optimism followinglast week's soft jobs data faded.
The South Korean won KRW=KFTC led losses amongst emerging Asian currencies with a 0.4% fall, while Thai baht THB=TH lost 0.2%.
The Indonesian rupiah IDR= fell 0.3%. The country's finance minister on Tuesday said volatility in forex markets over the last month needs to be monitored and carefully managed, adding that strength in dollar was having a more immediate effect.
The dollar has remained dominant this whole year, and "the dollar is going to remain resilient because in our view, the Fed is only going to cut one time this year," said Alvin Tan, head of Asia FX strategy at RBC Capital Markets.
"The market by anticipating more than one cut by the Fed, is overdone in the dovish expectation of the Fed," Tan added.
In other currencies, the Philippine peso PHP= fell 0.3% and the Taiwanese dollar TWD=TP fell 0.2%. Both countries reported lower-than-expected inflation numbers on Tuesday.
The Malaysian ringgit MYR= fell 0.2% ahead of country's key interest rate decision on Thursday. The central bank held rates steady at the last meeting but noted that the ringgit was undervalued.
"It is not a very acute situation for the (Malaysian) central bank, so I don't think they will be driven to hike just because of the exchange rate," Alvin Tan said.
Meanwhile, most stocks in the region were lower as investors assess the U.S. Federal Reserve's rate cut timings and the number of cuts this year, after last week's softer-than-expected jobs data gave a dovish signal that had buoyed regional equities markets.
Stocks in Indonesia .JKSE fell as much as 0.7%, while Singapore shares lost as much as 1%.
Philippine shares .PSI were down 0.7%, while stocks in Thailand .SETI were largely muted.
Shares in Taiwan .TWII and South Korea .KS11 both inched 0.1% higher, while Malaysian stocks .KLSE were largely unchanged.
HIGHLIGHTS:
** Indonesia's FX reserves drop to $136.2 bln at end-April
** China's yuan slips as hawkish Fed comments boost dollar
** Bank of Japan issues stronger warning over yen's impact on policy
#NAME? | ||||||
COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
Japan | JPY= | -0.31 | -9.09 | .N225 | -1.48 | 14.33 |
China | CNY=CFXS | -0.09 | -1.76 | .SSEC | -0.41 | 5.37 |
India | INR=IN | +0.02 | -0.34 | .NSEI | -0.26 | 2.36 |
Indonesia | IDR= | -0.28 | -4.29 | .JKSE | -0.60 | -2.64 |
Malaysia | MYR= | -0.17 | -3.25 | .KLSE | 0.02 | 10.41 |
Philippines | PHP= | -0.26 | -3.56 | .PSI | -0.32 | 2.29 |
S.Korea | KRW=KFTC | -0.42 | -5.70 | .KS11 | 0.10 | 3.08 |
Singapore | SGD= | -0.15 | -2.72 | .STI | -0.92 | 0.91 |
Taiwan | TWD=TP | -0.21 | -5.25 | .TWII | 0.05 | 15.24 |
Thailand | THB=TH | -0.22 | -7.51 | .SETI | -0.01 | -2.79 |
Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
Asian stock markets https://tmsnrt.rs/2zpUAr4
Reporting by Ayushman Ojha in Bengaluru; Editing by Lincoln Feast.
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