Asian FX weak on Fed rate-cut outlook; Indonesian rupiah leads losses

Reuters

Asian FX weak on Fed rate-cut outlook; Indonesian rupiah leads losses

9 سبتمبر 2024 الساعة 16:5 صباحاً بتوقيت GMT

<html xmlns="http://www.w3.org/1999/xhtml"><head><title>EMERGING MARKETS-Asian FX weak on Fed rate-cut outlook; Indonesian rupiah leads losses</title></head><body>

Rupiah clocks worst session in 2 weeks

Taiwan dollar logs biggest percentage loss in 1 month

Asian equities mixed; Taipei stocks top laggard

By Roushni Nair and Rajasik Mukherjee

Sept 9 (Reuters) -Asian currencies fell on Monday, with the Indonesian rupiah leading losses, as investors hesitated to make riskier bets ahead of a key U.S. inflation reading later in the week.

The Indonesian rupiah IDR= dipped as much as 0.7% by 0346 GMT to mark its biggest intra-day percentage decline since Aug. 27. The Malaysian ringgit MYR= and the Taiwanese dollar TWD=TP followed suit to lose as much as 0.5% each.

Investors analysed last week's mixed U.S. jobs data and comments from U.S. Federal Reserve officials,which suggested a weak labor market but without sufficient justification for a 50-basis-point interest rate cut. The U.S. inflation report on Wednesday will be a key indicator that could shift market expectations.

The U.S. dollar index USD=, which tracks the currency's value against six major peers, rose marginally by 0.2% to 101.267. The broad MSCI emerging markets currency index .MIEM00000CUS was down as much as 0.3%, heading for its worst session in over two weeks.

Fakhrul Fulvian, an economist at Trimegah Securities, said Indonesia's rupiah was under pressure from overly ambitious U.S. rate cut expectations but said expectations of lower issuance of rupiah securities by Bank Indonesia was likely to normalise the currency market.

Equities in the region traded mixed, with those in Taipei .TWII and Seoul .KS11 down 1.8% and 0.8%, respectively, while shares in Manila .PSI and Singapore .STI advanced over 0.8%, each. Shares in Jakarta .JKSE slipped 0.7% and Thailand .SETI fell 0.3%.

Taiwan and South Korea's economies are closely tied to the U.S. through significant foreign investment and strong trade ties, making them vulnerable to changes in U.S. monetary policy, which has a direct impact on their stock markets.

Thailand's shares surged over 5% last week, extending a four-week rally, driven by improving sentiment as political instability fades and optimism grows over the incoming Vayupak Fund, a state investment fund expected to boost capital inflows.

In Malaysia, stocks .KLSE traded flat, although, 99 Speed Mart Retail IPO-99SP.KL opened higher in its stock market debut after the mini-market chain retailer raised 2.36 billion ringgit ($543 million) in the country's biggest listing in seven years.

In China, investors are growing cautious as inflation in Southeast Asia's largest trading partner accelerates to a six-month high, adding to pressure on the government to implement more policies to address a sluggish economy, housing downturn, joblessness, debt woes, and rising trade tensions.

Shares in Shanghai .SSEC slipped nearly 1%, while the yuan CNY=CFXS slid 0.1%.

($1 = 4.3450 ringgit)

HIGHLIGHTS:

** Indonesian 10-year benchmark yields rise 3.3 basis points to 6.89%

** Japan's Q2 GDP growth revised down; softer consumption to test BOJ policy

Asia stock indexes and currencies at 0432 GMT
COUNTRY	FX RIC	FX DAILY %	FX YTD %	INDEX	STOCKS DAILY %	STOCKS YTD %
Japan	JPY=	-0.34	-1.19	.N225	-1.30	7.94
China	CNY=CFXS	-0.12	-0.15	.SSEC	-0.92	-7.88
India	INR=IN	+0.00	-0.88	.NSEI	-0.04	14.31
Indonesia	IDR=	-0.49	-0.26	.JKSE	-0.77	5.35
Malaysia	MYR=	-0.39	+5.64	.KLSE	0.08	13.73
Philippines	PHP=	-0.20	-1.59	.PSI	0.82	8.41
S.Korea	KRW=KFTC	+0.01	-3.86	.KS11	-0.47	-4.63
Singapore	SGD=	-0.01	+1.27	.STI	0.90	7.56
Taiwan	TWD=TP	-0.48	-4.19	.TWII	-1.51	17.73
Thailand	THB=TH	-0.19	+1.14	.SETI	-0.27	0.56