South Korean won, Thai baht lead losses in Asian FX on higher crude prices

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Most Asian currencies were on the

back foot on Monday, with the South Korean won and Thai baht

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suffering the most losses, as a jump in crude prices globally

put the narrative back on higher inflation, stoked by OPEC+’s

output cut announcement.

The South Korean won depreciated as much as 1.5%,

to see its worst day in almost a month, while the Thai baht

also slumped about 1.2%.

The won is currently the weakest currency in emerging Asia,

having lost nearly 4% on a year-to-date basis.

Christopher Wong, a currency strategist from OCBC said the

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surge in oil prices could potentially pose more downward

pressure to sentiment-proxy, net importer Asian currencies,

including the South Korean won and the Thai baht, in the near

term.

Brent oil futures rallied after OPEC+ late on Sunday

announced further oil production cuts of around 1.16 million

barrels per day. That overshadowed market optimism of a softer

reading of core inflation from the U.S. on Friday.

A jump in oil prices usually results in a selloff in riskier

assets since it becomes more expensive for net oil importers to

buy crude, pushing up price pressures in countries with a large

dependence on oil.

“The OPEC+ cut reflected the organisation’s bearish view on

crude oil demand after the banking turmoil and could pressure

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the Fed to extend its rate hike cycle to anchor inflation

expectation,” said Ken Cheung Kin Tai, Chief Asian FX Strategist

from Mizuho Bank.

The Malaysian ringgit, Philippines peso and

the Singapore dollar fell between 0.2% and 0.5%

Separately, the safe-haven dollar received a boost as market

players adjusted their expectations for the possibility of

further rate hikes.

The dollar index, which measures the strength of the

greenback against six major currencies was at 103.00 by 0625

GMT.

Weaker factory activity data from Asia added to the woes in

Asian markets as soft overseas demand hurt output, pointing to a

deteriorating global economic outlook.

Inflation in Indonesia cooled to its lowest in seven months

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in March, as prices rose slower than usual.

However, equities in Asia traded positively, with stocks in

Singapore and Malaysia gaining about 0.6% and

0.3%.

Other indices in Indonesia and the Philippines

rose more than 0.2% each, though shares in Bangkok

and Seoul shed 0.7% and 0.3%.

Markets in Taiwan were closed for a public holiday.

HIGHLIGHTS:

** Indonesian 10-year benchmark yields fall to 6.787%

** Malaysia open to talks with Beijing over dispute in South

China Sea – PM

** Indian shares little changed amid oil-linked inflation

concerns

Asia stock indexes and currencies at

0625 GMT

COUNTRY FX RIC FX FX YTD INDEX STOCKS STOCKS

DAILY % % DAILY YTD %

%

Japan -0.59 -1.85 <.n22>

China C>

India -0.29 +0.39 <.nse i>

Indonesi +0.00 +3.84 <.jks a e>

Malaysia -0.23 -0.45 <.kls e>

Philippi -0.65 +1.92 <.psi nes>

S.Korea 1>

Singapor -0.21 +0.48 <.sti e>

Taiwan – +0.83 <.twi i>

Thailand -1.07 +0.44 <.set i>

(Reporting by Archishma Iyer in Bengaluru; Editing by Janane

Venkatraman)