Asian FX, equities subdued as focus returns to global policy tightening

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Asian Currencies and Stocks

struggled for direction on Thursday as investors took their direction

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Attention back to the US and global monetary policy

Post-crisis tightening campaigns in global finance

Sector loosened.

The Thai baht recouped some of its early losses

Depreciated 0.2% after rising for two straight days. The

Currency is on course for a monthly gain of over 2.5% in March.

The poll-bound country also saw its tariff-based exports

Contract for a fifth consecutive month, with expected deliveries

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continue to fall in the first half of the year before improving

the second half, the Commerce Department said.

The Bank of Thailand (BOT) also hiked interest rates by 25

Basis points (bps) on Wednesday in line with expectations as

The central bank is trying to fight rising inflation.

“We stand by their view for a final 25 basis point hike in May

bring the final interest rate to 2%. BOT is expected to stand

pat in H2 2023 when inflation returns to its target range, the

could happen as early as Q2 2023,” Maybank analysts said.

Meanwhile, most other Asian currencies remained muted

Malaysian ringgit and Philippine peso fall

0.1% while the South Korean won gained 0.3%. The

The Singapore dollar was unchanged.

FX markets lacked firm direction this week, in part because of this

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on quarterly/monthly flows and ahead of US economic data, said

Analysts at Overseas-Chinese Banking Corporation.

Traders look out for US February

Consumer spending (PCE) data, the Fed prefers

Inflation gauge to further gauge interest rate outlook

courses and the dollar.

In addition, the Chinese yuan rose incrementally,

while shares in Shanghai gained 0.5% as investors

wait for China’s manufacturing data for March on Friday

measure the health of the world’s second largest economy.

“The rest of the world has strong ties to China’s goods

Consumption but limited exposure to demand for services. The

means traditional beneficiaries such as Europe and North Asia

will see less positive impact from China’s growth than

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historical trends would suggest,” Barclays analysts said in

a note.

Elsewhere, the Malaysian central bank showed prospects for

further hikes to its reference rate as inflation levels are

expected to remain moderate but remains elevated throughout the year

Year.

Malaysian ringgit fell 0.1% but trailed a

1.4% gain for the month of March.

Stock markets in the region declined slightly

Shares in Singapore, Malaysia and Thailand

fell between 0.2% and 0.5%.

HIGHLIGHTS:

** EXPLANATION – Why is Myanmar’s military holding an election?

** China’s indebted local government hiring frenzy is heating up

fiscal fears

** Singapore’s Cenbank says digital services will be disrupted

DBS “unacceptable”

Asian stock

indices and

currencies at

0634

Greenwich Mean Time

COUNTRY FX FX FX INDEX STOCKS STOCKS

RIC DAILY % YTD DAILY % YTD %

%

Japan +0.26 -1.05 -0.36 6.47

China +0.11 +0.31 0.50 5.41

India +0.00 +0.46 0.76 -5.66

Indonesia +0.07 +3.42 -0.23 -0.39

Malaysia -0.07 -0.43 -0.20 -5.22

Philippines -0.11 +2.33 -0.18 0.80

S.Korea +0.28 -2.66 0.38 9.69

Singapore +0.04 +0.84 -0.27 0.08

Taiwan -0.04 +0.79 0.51 12.11

Thailand -0.20 +1.07 -0.50 -3.97

(Reporting by Jaskiran Singh in Bengaluru; Editing by Shri

Navaratnam and Uttaresh Venkateshwaran)