Asian FX, stocks under pressure as US inflation rises, Thai baht leads losses

  • Malaysia’s fourth quarter GDP grows 3.6%
  • Baht eyes worst session since January 28
  • Philippines stock falls 2.2%
  • Japanese markets closed for the holidays

Feb 11 (Reuters) – Asian currencies and stocks came under pressure on Friday as higher-than-expected U.S. inflation rattled risk sentiment and fueled bets on more aggressive rate hikes, the Thai baht and the South Korean won having fallen the most among their peers.

Malaysia’s ringgit held steady after data showed the economy returned to growth in the fourth quarter of 2021, up 3.6% from a year earlier, as economic activity resumed after coronavirus curbs eased. P8N2OQ03E

The ringgit fell 0.1% while stocks rose 0.3%.

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The baht fell 0.3%, following its worst session since January 28. Thai consumer confidence fell in January for the first time in five months, hit by a spike in coronavirus cases, a slow economic recovery and high goods prices, a survey showed on Thursday. Read more

The South Korean won fell 0.2% to lead the losses, while its shares fell 0.5%.

Most Asian stocks fell, with the Philippines (.PSI) leading the pack with a 1.5% decline, followed by Indonesia (.JKSE), down 0.4%. Thai stocks (.SETI) were largely flat.

IG strategist Yeap Jun Rong said in a note that investors “did not appear to be reacting with an initial reaction (to US inflation data), suggesting that markets may want to look to economic data to guide expectations, given that we have seen many central banks reverse their inflation policy.”

Comments from the Federal Reserve on rate hikes join ranks with a hawkish pivot at the European Central Bank last week, keeping greenback and US Treasury yields firm. Read more

The Indonesian rupiah fell 0.1% a day after the central bank governor said he would review policy rate levels in the third quarter to avoid any spike in inflation next year. Read more

“We will get inflation readings from China next week, which will be one to watch given its impact on global prices,” Rong said.

Strong points:

**Indonesian benchmark 3-year yields are up 2.7 basis points to 4.439%​​

** Straits Times Index (.STI) up 0.22% with Comfortdelgro Corporation Ltd (CMDG.SI) up 2.07%, DBS Group Holdings (DBSM.SI) up 1.17% and Sembcorp Industries up 0.82%

** The NSE Nifty 50 Index (.NSEI) fell 1.1%, while the S&P BSE Sensex (.BSESN) fell 1.1%

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Reporting by Savyata Mishra in Bangalore

Our standards: The Thomson Reuters Trust Principles.

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