Asian currencies mixed; shares up on US debt ceiling deal hopes

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Asian currencies looked for direction

on Friday, with the Indonesian rupiah leading the laggards

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against a firm dollar amid stuttering growth in China and robust

U.S. economic data even as hopes of a debt ceiling deal pushed

shares higher.

Overnight data from the world’s largest economy indicated a

tight labor market, reinforcing expectations that the U.S.

central bank could raise rates again in June, strengthening the

dollar.

Hawkish rhetoric from some Fed officials also pushed the

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dollar index higher, which stood at 103.3, near a two-month high

at 0645 GMT.

“The mixed comments from Fed speakers in recent times on a

hike or a pause at the next upcoming meeting appears to

gradually be paring back market expectations that the Fed’s

tightening cycle is over just yet,” Maybank’s analysts wrote in

a note.

Markets are now pricing in a 36% chance of a 25 basis-point

hike when the Fed meets next month, as against a 10% bet

previously, according to the CME Watch Tool.

Additionally, growth concerns from China added to the

prevailing weak sentiment surrounding Asia, as data from over

the week showed that the economic trajectory is faltering post

the COVID-19 scenario.

The Chinese yuan had shed about 0.1% before

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rebounding to trade marginally higher, with trading operations

suggesting that authorities were trying to manage the rapidly

falling currency.

The currency has lost 1.1% for the week.

Among Asian currencies, the Indonesian rupiah

fell the most, dropping around 0.5% to hit the lowest in a

month. The currency, however, has turned the best performing

unit, gaining more than 4% against the dollar so far this year.

The Malaysian ringgit and the Thai baht

fell about 0.3% and 0.1%, respectively.

“In terms of the USD/RMB pair, that has been a drag on

the Asian currencies,” Moh Siong Sim, an FX Strategist from Bank

of Singapore said. “The concern about sustainability over

China’s growth has picked up and hence leading to the point

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where the yuan broke the psychological 7 level.”

Other units such as the Singapore dollar, the South

Korean won, and the Taiwan dollar were up in

the range of 0.1% to 0.5%.

However, Asian shares climbed, led by hopes of an

imminent U.S. debt ceiling deal.

Indexes in Singapore, Philippines, Taiwan

and Indonesia rose between 0.4% and 0.9%.

HIGHLIGHTS:

** Indonesian 10-year benchmark yields rise to 6.428%

** Indonesia proposes stronger rupiah assumption in 2024 –

finmin

** India market regulator proposes standard investor fees

for mutual funds

Asia stock indexes and currencies at 0645 GMT

COUNTRY FX RIC FX FX INDEX STOCKS STOCKS

DAILY % YTD % DAILY YTD %

%

Japan +0.43 -5.08 <.n225>

China >

India -0.14 +0.01 <.nsei>

Indonesi -0.44 +4.29 <.jkse a>

Malaysia -0.29 -3.23 <.klse>

Philippi +0.18 -0.02 0.58 1.53

nes

S.Korea >

Singapor +0.05 -0.51 0.63 -1.50

e

Taiwan +0.29 +0.10 <.twii>

Thailand -0.16 +0.41 <.seti>

(Reporting by Archishma Iyer in Bengaluru; Editing by Dhanya

Ann Thoppil)