- Malaysian ringgit hits 19-month high
- Indonesia rate decision due on Wednesday
- Philippine stocks hit highest since March 2022
Most Asian stock markets rose on Tuesday, while currencies edged higher against a weaker dollar on increasing bets of an outsized rate cut by the U.S. Federal Reserve this week.
The dollar traded near its lowest levels of the year as markets pushed the chance of a 50 basis point rate cut to 67%, up from 30% a week ago.
The Malaysian ringgit <MYR=> was the top gainer among regional currencies, rising 0.5% to a 19-month high, while stocks <.KLSE> were up 0.6%.
Trading was thin as markets in South Korea, China and Taiwan were closed for public holidays.
In Thailand, the government will nominate Kittiratt Na Ranong, a ruling party loyalist and critic of the central bank governor, for chair of the Bank of Thailand (BOT), Reuters reported on Monday, citing two sources.
Kittiratt, a former deputy premier and finance minister, locked horns frequently with the then-governor of the central bank over monetary policy. Interest rates in Thailand remain at a decade-high level, despite repeated calls for easing by the government.
“I think there would be limited influence from the new BOT chairman as he is clearly not the part of the monetary policy committee (MPC),” said Poon Panichpibool, markets strategist at Krung Thai Bank.
“However, it is undeniable that there could be some influences via external MPC members.”
The Thai baht <THB=TH> and stocks <.SETI> were largely unchanged.
In Indonesia, the rupiah <IDR=> gained 0.4% ahead of the central bank’s policy rate decision on Wednesday. Bank Indonesia will likely keep interest rates steady to support the rupiah, but is expected to cut next quarter, according to a Reuters poll.
“Now EM Asian currencies seem to face less pressures as the Fed is about to deliver easing monetary policy, it would offer some leeway from the Asian central banks to lower policy (rates) if (needed),” Poon said.
Meanwhile, data showed that Asian bonds attracted the biggest foreign inflows in more than five years in August, buoyed by optimism that the Fed would start cutting rates in September.
Among stock markets, Singapore <.STI> rose 0.7% and traded at its highest level in more than six years reached last week. Philippine shares <.PSI> climbed as much as 1.1% to their highest since late March 2022.
HIGHLIGHTS:
** Singapore’s August exports rise 10.7% y/y, lower than forecast
** BOJ to signal gradual, steady rate hikes at next policy meeting
| Asian stocks and currencies at 0652 GMT | ||||||
| COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
| Japan | <JPY=> | -0.02 | +0.31 | <.N225> | -1.03 | 8.19 |
| China | <CNY=CFXS> | – | +0.03 | <.SSEC> | – | -9.10 |
| India | <INR=IN> | +0.08 | -0.73 | <.NSEI> | 0.14 | 16.97 |
| Indonesia | <IDR=> | +0.42 | +0.42 | <.JKSE> | 0.06 | 7.48 |
| Malaysia | <MYR=> | +0.54 | +7.37 | <.KLSE> | 0.60 | 14.25 |
| Philippines | <PHP=> | +0.16 | -0.58 | <.PSI> | 1.00 | 11.24 |
| S.Korea | <KRW=KFTC> | – | -3.13 | <.KS11> | – | -3.01 |
| Singapore | <SGD=> | +0.05 | +1.93 | <.STI> | 0.66 | 10.91 |
| Taiwan | <TWD=TP> | – | -3.68 | <.TWII> | – | 21.86 |
| Thailand | <THB=TH> | -0.02 | +2.81 | <.SETI> | 0.10 | 1.50 |
—Reporting by Ayushman Ojha and Sneha Kumar in Bengaluru; Editing by Jamie Freed and Subhranshu Sahu
