Most Asian currencies climbed on
Friday, as a buoyant dollar took a breather with gains led by
the Philippine peso, a day after the country’s central bank said
it would match the Federal Reserve’s 75-basis-point rate hike to
quell rising inflation.
The U.S. dollar index, which eased 0.3%, still looked
set to post its best week in over a month. The Thai baht
and the Singapore dollar advanced 0.5% and 0.3%,
respectively. The Chinese yuan edged 0.2% higher.
“Dollar continues to see modest upward pressures as markets
digest the net hawkish messaging out of the Fed’s decision,”
Maybank analysts said in a note.
The peso, which has tumbled 13% this year against the
greenback and is Southeast Asia’s worst-performing currency,
rose 0.6% after Bangko Sentral ng Pilipinas (BSP), on Thursday,
said it will hike rates later this month in tandem with the Fed
to maintain the interest rate differential.
“BSP’s pre-announced move was carried out to help steady the
peso, which was expected to come under significant pressure due
to the Fed 75bp rate hike. If BSP is successful in limiting peso
weakness, it can help mitigate imported inflation to a modest
extent,” said Nicholas Mapa, senior economist at ING.
Philippine inflation accelerated to its fastest pace in 14
years in October, backing expectations the central bank will
keep tightening monetary policy.
“BSP rate hikes will hopefully re-anchor inflation
expectations to help prevent runaway inflation but should supply
side pressures persist, we expect so called second round effects
to proliferate even in 2023,” Mapa added.
In Thailand, its central bank said on Thursday monetary
policy will take into account the country’s economic growth,
inflation rate, and financial stability. The baht has fallen
11.5% so far this year against the dollar.
Regional stocks were on the back foot, after the Wall
Street fell for a fourth straight session, as lingering concerns
about the hawkish tone struck by the Fed on Wednesday weighed on
Equities in the Philippines and Indonesia
fell 0.9% and 0.6%, respectively. The Taiwan benchmark
“Asian markets will tread lightly as investors will closely
eye the non-farm payrolls report due later in the day for signs
pointing to the notable impact the Fed’s rate hikes were
beginning to have on slowing the economy,” OCBC analysts said.
** Indonesian 10-year benchmark yields rise 3.9 basis points
** Oil prices slid on fears U.S. interest rates will go
higher than previously expected and fresh concerns that COVID
outbreaks will dent fuel demand in China
Asia stock indexes and currencies at 0343 GMT
COUNTRY FX RIC FX FX INDE STOCKS STOCKS
DAILY % YTD % X DAILY YTD %
Japan +0.10 -22.3 <.n2>
India +0.21 -10.1 <.ns ei>
Indonesi -0.22 -9.41 <.jk a se>
Malaysia -0.03 -12.2 <.kl se>
Philippi +0.62 -12.8 <.ps nes i>
Singapor +0.30 -4.83 <.st e i>
Taiwan +0.04 -14.1 <.tw ii>
Thailand +0.46 -11.6 <.se ti>
(Reporting by Tejaswi Marthi in Bengaluru
Editing by Shri Navaratnam)