Asian FX, stocks muted on revised Fed rate-cut bets, US vote uncertainty

Reuters

Asian FX, stocks muted on revised Fed rate-cut bets, US vote uncertainty

25 أكتوبر 2024 الساعة 56:7 صباحاً بتوقيت GMT

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South Korean won hits 3-month low

U.S. dollar up for four straight weeks

Thai stocks eye worst week in four months

Updates at 0720 GMT

By Aaditya GovindRao and Roushni Nair

Oct 25 (Reuters) -The Philippine peso and Indonesian rupiah led declines among Asian currencies on Friday, extending recent losses on bets the U.S. Federal Reserve will slow rate cuts, while regional stocks were mixed on uncertainty about the U.S. election outcome.

The peso PHP= fell 0.7% to 57.92 per U.S. dollar, a level last seen on Aug. 2, while the rupiah IDR= was down 0.4%, as of 0646 GMT.

The Malaysian ringgit MYR= reversed course to trade 0.2% higher, after edging down 0.1% earlier and on track for fourth straight week of declines, its longest such run in a year.

The dollar index =USD was largely unchanged at 104.04, after reaching a three-month high of 104.57 earlier this week. The index is on track for a 3.6% gain since the week ended Sept. 23, and poised to record its strongest weekly performance since Sept. 30. USD/

The greenback strengthened as investors revised interest rate cut expectations and factored in a potential second Trump presidency, which could bring inflationary policies, slower rate cuts, and pressure on trading partners' currencies.

The market was completely pricing in a cut of at least 25 basis points a month ago, with a 58.2% chance of a 50-bp cut, according to CME's FedWatch Tool.

"As the U.S. elections approach and Trump trades are being implemented, the dollar is likely to remain on the front foot and the U.S. rates are likely to remain elevated, creating a somewhat painful backdrop for EM assets," analysts at Barclays said.

The rupiah has fallen 1.1% this week, set for its worst week since Sept. 30.

However, the reappointment of Sri Mulyani Indrawati as the finance minister in the newly sworn-in President Prabowo Subianto's cabinet - signals policy continuity to investors.

The Thai baht THB=TH has fallen nearly 1.5% this week and slipped as much as 0.5% earlier in the day, before recouping some losses to trade 0.3% lower.

Bank of Thailand Deputy Governor Piti Disyatat told Reuters in an interview that the country's low and well-anchored inflation poses no risk of deflation.

The Korean won KRW=KFTC declined up to 0.6% to its lowest level since July 19. Local media reported South Korea's finance minister had flagged risks to growth forecasts.

Stocks in Bangkok .SETI were up 0.2% but were on track for their worst week since early June, down nearly 1.8%. Singapore equities .STI fell 0.5% and were set for their biggest weekly loss since early August.

HIGHLIGHTS:

** Japan's general election outcome could muddle BOJ plans

** Singapore's September manufacturing output up 9.8%, more than expected

Asian stocks and currencies as at 0646 GMT
COUNTRY	FX RIC	FX DAILY %	FX YTD %	INDEX	STOCKS DAILY %	STOCKS YTD %
Japan	JPY=	-0.07	-7.15	.N225	-0.60	13.90
China	CNY=CFXS	-0.08	-0.40	.SSEC	0.45	10.75
India	INR=IN	0.00	-1.03	.NSEI	-1.07	11.08
Indonesia	IDR=	-0.38	-1.54	.JKSE	-0.14	5.96
Malaysia	MYR=	+0.18	+5.83	.KLSE	-0.15	12.03
Philippines	PHP=	-0.70	-5.04	.PSI	0.26	13.22
S.Korea	KRW=KFTC	-0.46	-7.25	.KS11	0.09	-2.71
Singapore	SGD=	-0.15	-0.05	.STI	-0.50	10.70
Taiwan	TWD=TP	+0.02	-4.19	.TWII	0.67	30.21
Thailand	THB=TH	-0.25	+1.21	.SETI	0.21	3.38