Most Asian currencies were poised, on
Friday, to post losses for the week, as the U.S. dollar looked
set to clock its best week in over a month on bets that the
Federal Reserve could take interest rates above 5% next year.
For the week, the Indonesian rupiah fell 1.1% and is
on track for its worst week since Oct. 21. The Singapore dollar
fell 0.3%, while the Philippine peso and the
Malaysian ringgit skid 0.6% each for the week.
The U.S. dollar index, was on track for a weekly gain
of nearly 2%, its largest since September.
Fed rate futures now point to a terminal rate of about 5.15%
by mid-2023, after the Fed raised rates by 75 basis points (bps)
earlier this week.
“USD remains broadly firmer post-U.S. Federal Reserve
meeting. Fed chair Jerome Powell’s reference to higher peak rate
may still undermine sentiments in the interim and that means
pressure on Asian FX,” analysts at OCBC said.
On Friday, the Vietnamese dong fell 0.1% to hit a
fresh record low of 24,876 per dollar, while the benchmark stock
index fell 4.4%, marking its worst day in nearly a month.
Regional stocks were on the back foot, after Wall Street
fell for a fourth straight session overnight, as lingering
concerns about the Fed’s hawkish tone weighed on sentiment.
Equities in the Philippines and Indonesia
fell 0.9% and 0.6%, respectively. The Taiwan benchmark
Investors will closely watch the U.S. non-farm payrolls
report, due later in the day, for signs the Fed’s rate hikes are
beginning to have a notable impact on slowing the economy.
“Signs of a softer-than-expected labor market will be what
equity bulls need to fuel a near-term recovery,” said Yeap Jun
Rong, market strategist at IG.
The peso, which has tumbled 13% this year and is
Southeast Asia’s worst-performing currency, rose 0.6% after the
Philippines central bank said it will hike rates in tandem with
the Fed to maintain the rate differential.
Philippine inflation accelerated to its fastest pace in 14
years in October, backing expectations of continued monetary
policy tightening. Shreya Sodhani, research analyst at Barclays,
expects a 50-bps hike in December after the planned 75-bps hike
** Indonesian 10-year benchmark yields rise 3.9 bps to
** India cenbank may set 7.60% as cut-off yield for 14-yr
** Thai interest rates will be based on domestic situation,
not Fed – Finmin
Asia stock indexes and currencies at 0604 GMT
COUNTRY FX RIC FX FX INDE STOCKS STOCKS
DAILY % YTD % X DAILY YTD %
Japan +0.23 -22.2 <.n2>
India +0.44 -9.92 <.ns ei>
Indonesi -0.19 -9.38 <.jk a se>
Malaysia -0.03 -12.2 <.kl se>
Philippi +0.62 -12.8 <.ps nes i>
Singapor +0.41 -4.72 <.st e i>
Taiwan +0.16 -14.0 <.tw ii>
Thailand +0.89 -11.2 <.se ti>
(Reporting by Tejaswi Marthi in Bengaluru; Editing by Savio