Asian stocks, currencies gain on outsized US rate cut bets

Reuters

Asian stocks, currencies gain on outsized US rate cut bets

17 سبتمبر 2024 الساعة 13:5 صباحاً بتوقيت GMT

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Corrects Fed meeting to starting later on Tuesday, not Wednesday, in first paragraph

Malaysian ringgit hits 19-mth high

Indonesia rate decision due on Wednesday

Singapore stocks at over 6-yr high

By Ayushman Ojha and Sneha Kumar

Sept 17 (Reuters) -Most Asian equities were higher on Tuesday, while currencies edged up on a weak dollar over increasing bets on an imminent outsized rate cut by the U.S. Federal Reserve in its meeting starting later in the day.

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. [FEDWATCH]

The Malaysian ringgit MYR= was the top gainer among regional currencies, rising 0.5% to a 19-month high, while stocks .KLSE were up 0.7%.

Trading was thin as financial 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). However, it is undeniable that there could be some influences via external MPC members," said Poon Panichpibool, markets strategist at Krung Thai Bank.

The Thai baht THB=TH was the only loser among Asian emerging market currencies, inching 0.1% lower, while shares .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 Asian bonds attracted the biggest foreign inflows in more than five years in August on optimism on expected start to a U.S. easing cycle this month.

In equities, Singapore stocks .STI were up 0.6% and remained at their highest level in more than six years after reaching that milestone last week, while Philippine shares .PSI rose as much as 0.7%.

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 0451 GMT
COUNTRY	FX RIC	FX DAILY %	FX YTD %	INDEX	STOCKS DAILY %	STOCKS YTD %
Japan	JPY=	-0.03	+0.30	.N225	-1.83	7.31
China	CNY=CFXS	-	+0.03	.SSEC	-	-9.10
India	INR=IN	+0.06	-0.75	.NSEI	-0.05	16.75
Indonesia	IDR=	+0.39	+0.39	.JKSE	0.11	7.53
Malaysia	MYR=	+0.49	+7.32	.KLSE	0.68	14.34
Philippines	PHP=	+0.05	-0.68	.PSI	0.68	10.89
S.Korea	KRW=KFTC	-	-3.13	.KS11	-	-3.01
Singapore	SGD=	+0.01	+1.88	.STI	0.62	10.87
Taiwan	TWD=TP	-	-3.68	.TWII	-	21.86
Thailand	THB=TH	-0.11	+2.72	.SETI	-0.09	1.30