Most Asian FX rise on higher bets for US rate cut; Powell in focus
Thai baht gains for third straight day
Singapore's July core inflation rose 2.5%
Fed minutes further cemented rate-cut hopes
By Rajasik Mukherjee and Archishma Iyer
Aug 23 (Reuters) -The Thailand baht and Indonesian rupiah lead the pack among buoyant emerging Asia currencies gain on Friday, while investors awaited a potential acknowledgement of a September rate cut by the Federal Reserve during the ongoing Jackson Hole symposium.
Thailand's baht THB=TH gained 0.5% and was up for its third straight session on easing fears of political upheaval following the appointment of political neophyte Paetongtarn Shinawatra as the country's youngest prime minister.
Earlier this week, better-than-expected second-quarter GDP growth also generated some confidence among investors.
"Looking at macro, the baht is set to benefit from further normalization post-pandemic. GDP growth and current account may remain supported by export demand and tourism recovery," said Jeff Ng, head of Asia Macro Strategy of Sumitomo Mitsui Banking.
Investors will remain laser-focused on Fed Chair Jerome Powell's speech in Jackson Hole later in the global day, as he will look to address concerns on interest rate trajectory and the economy. MKTS/GLOB
Moreover, minutes from the Fed's recent policy meeting suggested that the world's most influential central bank was en route to cut its interest rate next month.
A few of the Fed officials also echoed the tone as they backed the U.S. central bank to go for a cut next month.
In Indonesia, which is embroiled in political protests, the rupiah IDR= recouped the previous session's losses to trade 0.4% higher.
Other emerging Asia currencies such as Malaysia's ringgit MYR= and the Taiwan dollar TWD=TP traded largely flat, while the South Korean won KRW=KFTC rose 0.4%.
Singapore's dollar SGD= rose 0.2%, as the July inflation reading showed the key consumer price gauge rose 2.5%, while stocks in the city state .STI traded marginally higher.
"With Fed rate cuts now seeming imminent, Asian currencies have finally snapped back into line with the narrowed yield gap since the start of the month," analysts from Capital Economics wrote in a research note.
Among Asian shares, Bangkok's .SETI rose about 0.8%, while those in Jakarta .JKSE, Seoul .KS11 and Beijing .SSEC traded between flat and 0.7% higher.
Meanwhile, Japan's central bank governor reaffirmed his resolve to hike interest rates if inflation stayed on track, resulting in the Japanese yen JPY=EBS gaining 0.3%.
Markets in the Philippines were closed due to a public holiday.
HIGHLIGHTS:
** Japan's core inflation picks up in July, but demand-driven growth below 2%
** Kamala Harris formally accepts Democrats' nomination for president
** High food prices in India threaten overall inflation outlook, say rate panel members
Asian currencies and stocks at 0455 GMT | ||||||
COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
Japan | JPY= | +0.35 | -3.22 | .N225 | 0.50 | 14.67 |
China | CNY=CFXS | +0.14 | -0.57 | .SSEC | 0.28 | -3.97 |
India | INR=IN | +0.06 | -0.83 | .NSEI | -0.01 | 14.16 |
Indonesia | IDR= | +0.42 | -0.87 | .JKSE | 0.74 | 3.73 |
Malaysia | MYR= | -0.05 | +4.84 | .KLSE | -0.30 | 12.52 |
Philippines | PHP= | - | -1.79 | .PSI | - | 7.94 |
S.Korea | KRW=KFTC | +0.36 | -3.79 | .KS11 | -0.07 | 1.91 |
Singapore | SGD= | +0.26 | +0.91 | .STI | 0.15 | 4.27 |
Taiwan | TWD=TP | -0.08 | -3.92 | .TWII | -0.27 | 23.19 |
Thailand | THB=TH | +0.51 | -0.50 | .SETI | 0.85 | -4.48 |
Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
Asian stock markets https://tmsnrt.rs/2zpUAr4
Reporting by Rajasik Mukherjee and Archishma Iyer in Bengaluru; Editing by Stephen Coates
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