Philippine peso leads decline among weak Asian FX; US inflation data awaited
.
Philippine stocks hit over 1-1/2-year high
Singapore shares touch over 6-year high
US inflation data due on Wednesday
By Roushni Nair and Sneha Kumar
Sept 10 (Reuters) -Asian currencies were subdued on Tuesday, with the Philippine peso leading losses, as investors took a cautious stance ahead of a highly anticipated U.S. inflation report that could trigger a substantial interest rate cut from the Federal Reserve.
The Philippine peso PHP= lost as much as 0.5%, declining for a third straight session. The South Korean won KRW=KFTC and the Taiwanese dollar TWD=TP declined 0.2% and 0.3%, respectively.
The U.S. dollar index =USD, which measures the currency against six major peers, was steady at 101.61 as of 0632 GMT after rising 0.4% on Monday.
The index has traded higher ever since a mixed labour report on Friday stoked uncertainty about whether the Fed would opt for a regular 25 basis-point rate cut or a larger 50 basis-point reduction at its Sept. 17-18 policy meeting, with investors turning to Wednesday's U.S. inflation data for more cues.
"If that's the case (higher-than-expected inflation), I would think recent outperforming EM Asia FX like THB could be (more) negatively affected than most due to a high correlation with not only the USD but also the gold price," said Poon Panichpibool, a markets strategist at Krung Thai Bank.
In the Philippines, July imports rose 7.2% from a year earlier, resulting in the largest trade deficit since March 2023, which could deplete the country's foreign exchange reserves and increase demand for foreign currencies, putting downward pressure on the peso.
The Malaysian ringgit MYR= rose 0.4% and was the outlier among its peers after the country's industrial production rose 5.3% in July and topped market expectations. The share market in Kuala Lumpur .KLSE rose 0.4%.
Most stock markets in Southeast Asia clocked gains, with the Philippines .PSI rising as much as 1.8% to its highest since Jan. 24, 2023. The benchmark index rose for the fourth straight session.
Prospects of another rate cut by the Bangko Sentral ng Pilipinas (BSP) and the Fed's dovish pivot have driven the country's main stock index past the 7,000 level.
Shares in Jakarta .JKSE and Singapore .STI climbed more than 0.5% each, while those in Bangkok .SETI lost 0.5%. Equities in Singapore touched their highest since late May 2018.
Imports in China, Southeast Asia's largest trading partner, fell short of expectations in August due to weak domestic demand.
The Chinese yuan CNY=CFXS was last down 0.4% and equities in Shanghai .SSEC dipped 0.5%.
With China's exports growing by 8.7%, there are concerns Chinese goods could hurt the export prospects of countries such as Thailand, Panichpibool said.
HIGHLIGHTS:
** Philippine trade deficit at $4.9 billion in July
** Malaysia end-August palm oil stocks up 7.34%, MPOB says
Asia stock indexes and currencies at 0653 GMT | ||||||
COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
Japan | JPY= | -0.18 | -1.65 | .N225 | -0.16 | 8.62 |
China | CNY=CFXS | -0.07 | -0.30 | .SSEC | 0.31 | -7.73 |
India | INR=IN | -0.02 | -0.91 | .NSEI | 0.34 | 15.14 |
Indonesia | IDR= | +0.03 | -0.32 | .JKSE | 0.66 | 6.61 |
Malaysia | MYR= | +0.37 | +5.47 | .KLSE | 0.36 | 13.94 |
Philippines | PHP= | -0.18 | -1.79 | .PSI | 0.01 | 8.29 |
S.Korea | KRW=KFTC | -0.20 | -4.15 | .KS11 | -0.49 | -4.97 |
Singapore | SGD= | +0.03 | +1.09 | .STI | 0.56 | 8.51 |
Taiwan | TWD=TP | -0.36 | -4.57 | .TWII | -0.38 | 17.47 |
Thailand | THB=TH | -0.01 | +0.98 | .SETI | -0.46 | 0.61 |
Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
Asian stock markets https://tmsnrt.rs/2zpUAr4
Reporting by Roushni Nair and Sneha Kumar in Bengaluru; Editing by Sonali Paul and Subhranshu Sahu
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