Asian stocks, currencies nudge higher as focus turns to US inflation

June 28, 2024 - 5:31 PM
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File photo of foreign exchange. (The STAR/KJ Rosales)
  • Traders await US PCE data due out later in day
  • All Asian currencies set to end 1H in red
  • Equities mixed over 1H; Taiwan set for around 29% gain

Asian currencies and stocks gained some ground on Friday and continued to trade in a tight range as caution prevailed ahead of a key U.S. inflation data, after a subdued week of trading impacted by the Federal Reserve’s cautious stance on rate cuts.

The Singapore dollar <SGD=> rose by 0.1%, while the Malaysian ringgit <MYR=> and the Thai baht <THB=TH> were largely unchanged.

“While a firm U.S. dollar and domestic (Thai) politics serve as near-term headwinds for the currency, we retain our sanguine outlook for the Thai baht in the later part of this year,” analysts at MUFG said in a client note.

Legal challenges against Thai politicians, including PM Srettha Thavisin, unsettled domestic politics and financial markets, adding uncertainty to Southeast Asia’s second-largest economy.

Traders keenly await the U.S. personal consumption expenditures (PCE) data, due later in the day, for insights into the Federal Reserve’s policy direction, while also preparing for a wave of inflation data expected next week from Indonesia, South Korea, the Philippines, and Thailand to gauge the potential trajectory of regional monetary policies.

The South Korean won <KRW=KFTC> was up 0.7% after data showed the country’s central bank sold a net $1.82 billion in the first quarter to arrest the local unit’s decline.

The Taiwan dollar <TWD=TP> advanced by 0.3% and logged its third straight week of gains.

In the first half of 2024, the baht, the won and Indonesian rupiah <IDR=>, and the Philippine peso <PHP=> faced substantial declines between 5% and 7%, ranking them as some of the weakest currencies in emerging Asian markets.

Conversely, the Indian rupee <INR=IN> emerged as the strongest performer in the region, experiencing only a slight depreciation of 0.3% year-to-date, buoyed by improving economic fundamentals and foreign investment inflows.

Equities in the region advanced on Friday, with shares in Jakarta <.JKSE> adding 1.6%, while those in Manila <.PSI>, Seoul <.KS11>, and Taipei <.TWII> were up between 0.3% and 0.6%.

Equities in the first half of 2024 displayed mixed results with South Korean, Malaysian and Indian shares poised to end the half-year with gains of 5.2% to 11.1%, while Taiwan shares surged nearly 28.5%, bolstered by strong performance in chip stocks.

HIGHLIGHTS:

Asia stock indexes and currencies at 0821 GMT
COUNTRYFX RICFX DAILY %FX YTD %INDEXSTOCKS DAILY %STOCKS YTD %
Japan<JPY=>-0.09-12.32<.N225>#VALUE!#VALUE!
China<CNY=CFXS>+0.04-2.32<.SSEC>0.73-0.25
India<INR=IN>+0.02-0.28<.NSEI>0.0810.73
Indonesia<IDR=>+0.15-5.96<.JKSE>1.58-2.68
Malaysia<MYR=>+0.02-2.69<.KLSE>0.159.12
Philippines<PHP=>+0.27-5.42<.PSI>0.33-0.59
S.Korea<KRW=KFTC>+0.66-6.44<.KS11>0.495.37
Singapore<SGD=>+0.14-2.75<.STI>-0.272.90
Taiwan<TWD=TP>+0.25-5.29<.TWII>0.5528.45
Thailand<THB=TH>+0.08-7.08<.SETI>-0.84-8.29

—Reporting by Roshan Thomas in Bengaluru; Editing by Janane Venkatraman