By Ayushman Ojha
Feb 27 (Reuters) – Most Asian currencies were subdued on Tuesday while stocks extended losses ahead of key U.S. and regional economic data this week that could provide clues about interest rate outlook from the Federal Reserve and other central banks.
Singapore shares .STI fell as much as 1.1% to their lowest levels since Feb. 14, while Taiwan stocks .TWII lost as much as 1%.
Indonesian stocks .JKSE lost up to 0.4%, on track for their fifth consecutive session of losses, and Philippine shares .PSI retreated as much as 0.7%.
Regional currencies failed to register substantial movement as the dollar stood largely flat ahead of key U.S. economic data that could provide more information on the Fed’s rate-cut trajectory.
The Indonesian rupiah IDR= and the Philippine peso PHP= inched 0.1% and 0.3% lower, respectively.
The U.S. core personal consumption expenditures (PCE) price index – the Fed’s preferred measure of inflation – is due on Thursday, where expectations are for a 0.4% increase on a monthly basis.
Markets have already ruled out a cut at the central bank’s March meeting.
In Asia, inflation data from Indonesia and Thailand are due on Friday.
Data from Malaysia and Singapore last week showed that inflation had accelerated less than expected in January.
The easing inflation trend has given central banks some leeway, but investor focus remains on the timing of further rate cuts. The central banks of Indonesia and South Korea left their policy rates unchanged last week.
“While inflation is coming off, in most of the region’s economies it has either just reached the target range or is still closing the gap to target range,” analysts at Morgan Stanley wrote.
Meanwhile, the focus remains on the Malaysian ringgit MYR=, which is trading near lows last seen in January 1998 and which has lost nearly 4% of its value so far this year.
The ringgit rose 0.2% on Tuesday after the Malaysian central bank said the currency is undervalued and should be trading higher on account of positive economic fundamentals and prospects.
“For Malaysia, it’s hard for them to raise rates at this point because growth momentum is weak and if they decide to cut with U.S. rates still high, that will only put more pressure on the currency,” said Lloyd Chan, senior currency analyst at MUFG Bank.
Bank Negara Malaysia (BNM) Governor Abdul Rasheed Ghaffour also said the central bank had stepped up engagements with government-linked companies, corporations and investors to encourage continuous flows into the foreign exchange market.
HIGHLIGHTS:
** Japan’s inflation beats forecasts, end of negative rates in sight
** India’s fourth-quarter GDP data due on Thursday
** China’s February purchasing manager’s index (PMI) numbers to be released on Friday
Asia stock indexes and currencies at 0731 GMT
COUNTRY
FX RIC
FX DAILY %
FX YTD %
INDEX
STOCKS DAILY %
STOCKS YTD %
Japan
JPY=
+0.21
-6.19
.N225
0.01
17.26
China
CNY=CFXS
+0.00
-1.39
.SSEC
1.29
1.36
India
INR=IN
+0.02
+0.40
.NSEI
0.18
1.98
Indonesia
IDR=
-0.06
-1.54
.JKSE
-0.14
0.01
Malaysia
MYR=
+0.17
-3.71
.KLSE
0.48
6.90
Philippines
PHP=
-0.32
-1.32
.PSI
-0.45
6.37
S.Korea
KRW=KFTC
+0.01
-3.23
.KS11
-0.83
-1.14
Singapore
SGD=
+0.04
-1.82
.STI
-0.66
-2.78
Taiwan
TWD=TP
-0.09
-2.68
.TWII
-0.49
5.15
Thailand
THB=TH
+0.10
-4.74
.SETI
-0.38
-1.63
Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
Asian stock markets https://tmsnrt.rs/2zpUAr4
(Reporting by Ayushman Ojha in Bengaluru; Editing by Miral Fahmy and Sherry Jacob-Phillips)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.