Asian currencies struggle ahead of Powell’s testimony, Indonesian rupiah top loser

Asian currencies struggle ahead of Powell’s testimony, Indonesian rupiah top loser

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Most Asian currencies slipped on

Tuesday, led by the Indonesian rupiah and Thailand’s baht, as

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investors pulled back from risky assets ahead of Federal Reserve

Chair Jerome Powell’s testimony that could throw light on the

size of future rate hikes.

The rupiah weakened as much as 0.49% to its lowest

since Jan. 12, while the Chinese yuan and South

Korea’s won eased 0.1% and 0.2%, respectively.

However, losses in emerging Asian currencies were limited

due to a slightly softer greenback. The U.S. dollar index

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, which measures it against six major rivals, slipped

after shedding 0.26% overnight.

“I forecast most emerging Asian currencies to be stronger in

the second half of this year, mainly due to an expected weakness

in the U.S. dollar,” said Poon Panichpibool, a markets

strategist at Krung Thai Bank.

Powell is due to deliver his semi-annual testimony before

Congress later in the day. It will be closely watched for clues

regarding the extent and duration of the U.S. central bank’s

restrictive monetary policy, which is aimed at curbing sticky

inflation.

Market participants are also keenly awaiting the U.S.

February jobs report due on Friday.

Asian stock markets were generally higher, but shares in

Jakarta dipped as much as 0.6%.

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Indonesian President Joko Widodo on Monday expressed his

support for an appeal against a controversial court ruling that

called for the 2024 presidential and general elections to be

delayed.

“A lot of foreign investors might still be interested in

Indonesian equities as the consumer market is huge and the

current valuation of Jakarta exchange is quite attractive,” said

Panichpibool, adding that the political situation would not cast

a prolonged negative effect on the rupiah.

In Thailand, headline consumer prices were 3.79% higher in

February than a year earlier, rising less than what analysts had

forecast mainly due to lower energy and food prices.

The Thai baht weakened as much as 0.49%, while

stocks in Bangkok gained 0.8%.

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In the Philippines, annual inflation eased for the first

time in six months in February, owing to lower transport and

food prices.

However, an interest rate hike at the central bank’s March

23 meeting looks almost certain, as inflation still remains

above its target range of 2% to 4%.

The Philippine peso weakened as much as 0.16%, while

stocks in Manila advanced 1.03%.

Shares in Singapore and Malaysia advanced

0.22% and 0.47%, respectively, while stocks in China

retreated 0.84%.

Separately, most emerging Asia ex-China equity markets

witnessed foreign outflows in February as strong U.S. economic

data stirred worries that the Fed would keep rates higher for

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longer than anticipated.

HIGHLIGHTS:

** Indonesian 10-year benchmark yields rise 1.1 bps to

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6.968%

** Malaysia cenbank to hold rates at 2.75% in March –

Reuters Poll

** Markets in India closed for a public holiday

** China’s January-February exports down 6.8% y-o-y

Asia stock indexes and currencies

at 0658 GMT

COUNTRY FX RIC FX FX INDEX STOCKS STOCKS

DAILY % YTD % DAILY YTD %

%

Japan +0.00 -3.53 0.25 10.08

China

India – +0.99 – -2.18

Indonesi -0.44 +1.35 -0.42 -1.05

a

Malaysia +0.02 -1.68 0.46 -2.42

Philippi -0.09 +1.03 0.80 2.41

nes

S.Korea

Singapor -0.02 -0.41 0.17 -0.20

e

Taiwan -0.08 +0.35 0.60 12.17

Thailand -0.30 +0.14 0.80 -2.93

(Reporting by Roushni Nair in Bengaluru; Editing by Subhranshu

Sahu)

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