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Malaysian ringgit heading for 0.7% loss in Feb
Philippine stocks set to gain 4.5% in Feb
Indonesia, Thailand Feb CPI due on Friday
By Ayushman Ojha
Feb 29 (Reuters) – Asian currencies were headed towards monthly declines, while equities were mixed on Thursday as investors remained cautious ahead of key U.S. data that could shed light on the timing of the Federal Reserve’s rate cuts.
Regional currencies, which rose towards the end of 2023 on an unexpected dovish shift from the Fed, have lost ground in 2024 as markets scale back expectations of a rate cut to June from March at the start of the year.
The Thai baht THB=TH edged 0.2% higher but was set for a 1.1% loss for February, while the Singapore dollar SGD= gained 0.1%, eyeing an 0.3% monthly fall.
Malaysia’s ringgit MYR= inched up 0.2%, but was on track to lose 0.7% for the month and has declined 3.7% so far in 2024.
The currency reached a 26-year-low last week, levels last seen during the 1998Asian financial crisis.
Country’s second Finance Minister Amir Hamzah Azizan said Malaysia expects the ringgit’s value to appreciate this year given positive fundamentals and prospects, adding that the government will not peg the ringgit as it did in 1998.
The response echoed previous statements from Prime Minister Anwar Ibrahim and the Bank Negara Malaysia (BNM) Governor Abdul Rasheed Ghaffour that the currency is undervalued.
“We see rising risks of verbal intervention as BNM’s tolerance for MYR volatility could be tested closer to the level of 4.80/USD,” analysts at BofA wrote.
The intervention may not be enough to sustainably support MYR due to stronger USD and negative carry, they added.
Meanwhile, the Taiwanese dollar TWD=TP was largely unchanged and set to lose 0.9% in February after a 1.8% fall in January.
Traders in Taiwan said cross-strait tensions weighed on the local currency. China’s coast guard has begun patrolling near the Taiwan-controlled Kinmen islands after two Chinese nationals died trying to flee Taiwan’s coast guard.
Stocks in the region were largely mixed ahead of U.S. January personal consumer expenditures (PCE) price index – Fed’s preferred inflation measure. It is expected the index to have risen 0.3% on a monthly basis after a 0.2% increase in December, according to Reuters poll.
Shares in thePhilippines .PSI rose as much as 1%,on track to gain 4.5% in February, while Taiwan stocks .TWII gained 0.6%, set for their best month since November 2023.
On the other hand, Thailandstocks .SETI dropped as much as 0.7% while Malaysian stocks .KLSE were up as much as 0.5%.
Amongst local data, focus is on February inflation data from Thailand and Indonesia, both due on Friday, for clues that when regional central banks could start cutting rates.
“Stronger USD and higher U.S.rates have also pushed back expectations for Bank Indonesia’s rate cut cycle and have weighed on debt flows over the last month,” BofA analysts said.
HIGHLIGHTS:
** Thai Jan factory output drops 2.94% y/y, beats forecast
** China securities regulator to tighten scrutiny of derivatives, high-frequency trading
** India’s fourth-quarter GDP data due on Thursday, China’s February PMI numbers to be released on Friday
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Asia stock indexes and currencies at 0735 GMT |
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|
COUNTRY |
FX RIC |
FX DAILY % |
FX YTD % |
INDEX |
STOCKS DAILY % |
STOCKS YTD % |
|
Japan |
JPY= |
+0.61 |
-5.80 |
.N225 |
-0.11 |
17.04 |
|
China |
CNY=CFXS |
+0.03 |
-1.35 |
.SSEC |
1.94 |
1.35 |
|
India |
INR=IN |
-0.01 |
+0.33 |
.NSEI |
-0.04 |
0.97 |
|
Indonesia |
IDR= |
-0.25 |
-2.07 |
.JKSE |
-0.19 |
0.57 |
|
Malaysia |
MYR= |
+0.19 |
-3.53 |
.KLSE |
0.37 |
6.64 |
|
Philippines |
PHP= |
+0.12 |
-1.44 |
.PSI |
0.99 |
7.67 |
|
S.Korea |
KRW=KFTC |
+0.16 |
-3.27 |
.KS11 |
-0.37 |
-0.49 |
|
Singapore |
SGD= |
+0.11 |
-1.88 |
.STI |
0.20 |
-2.93 |
|
Taiwan |
TWD=TP |
-0.03 |
-2.68 |
.TWII |
0.60 |
5.78 |
|
Thailand |
THB=TH |
+0.24 |
-4.74 |
.SETI |
-0.68 |
-3.05 |
Reporting by Ayushman Ojha in Bengaluru; Editing by Michael Perry and Varun H K