*
Singapore dollar touches highest since January 2018
*
Philippine peso hits more than seven-month high
*
Indonesia's rupiah at more than four-month high
*
Fed's Powell remarks boost risk appetite
By Upasana Singh Feb 2 (Reuters) - The Singapore dollar hit its highest level in more than five years on Thursday, while currencies across emerging Asia surged as U.S. Federal Reserve Chair Jerome Powell's comments on disinflation boosted risk sentiment. Singapore's dollar appreciated 0.2% to 1.3038 per U.S. dollar, its highest since January 2018, and has been on an upward trajectory this year helped by rising expectations of easing inflation and less aggressive monetary tightening this year.
"The Singapore dollar NEER (nominal effective exchange rate) has retreated from the top towards the mid-point of (the Monetary Authority of Singapore's) policy band, a sign that policy focus may start to shift from inflation towards economic slowdown," said DBS Bank foreign exchange strategist Philip Wee. Among other regional currencies, the Philippine peso surged 1% to hit its highest since June 20. Indonesia's rupiah firmed 0.7%, its highest in more than four months. The Malaysian ringgit rose 0.6%.
South Korea's won appreciated 1% to hit a 10-month high. The Thai baht was up 0.1%.
"The Fed, struggling to convince markets of its hawkishness, may provide further upsides for Asia currencies," analysts at MUFG Bank said in a client note. The Fed raised interest rates by a widely expected 25 basis points (bps) on Wednesday, with Powell saying a "disinflationary process has started" - a sign markets interpreted as signalling the end of its rate-hiking cycle is near.
"While Powell did say he doesn't see the Fed cutting rates this year, the absence of any forceful push-back against market expectations for rate cuts somewhat lent support to sentiment," said OCBC currency strategist Christopher Wong. The dollar index , which measures the greenback against six major peers, fell to a nine-month low of 100.80 following Powell's remarks. Meanwhile, South Korea's consumer inflation rate ticked up in January to a three-month high but, driven mostly by temporary effects, left investors still confident that the central bank had ended its cycle of interest rate rises. Last month, most of the Bank of Korea's board members were seen turning cautious about additional rate hikes, though the board voted that day to raise rates by 25 bps to 3.50%.
Stock markets in the region were broadly higher, with
equities in Taipei advancing 0.9% and leading gains.
Indonesia's benchmark index rose 0.4%, while stocks in
Kuala Lumpur inched 0.2% higher.
Equities in Manila , Singapore and Bangkok were outliers in the region, declining between 0.1% and
0.8%.
HIGHLIGHTS:
** India's Adani Group will review its capital raising plan
once the market stabilises, after Adani Enterprises Ltd withdrew a $2.5 billion share sale citing the need to
insulate investors from potential losses
** Technology giant Samsung Electronics Co Ltd and peer SK Hynix Inc are among top gainers on South
Korea's benchmark The following table shows rates for Asian currencies against
the U.S. dollar at 0353 GMT.
COUNTRY FX RIC FX FX INDE STOCKS STOCKS
DAILY % YTD % X DAILY YTD %
%
Japan +0.29 +1.98 <.N2 0.07 4.97
25>
China <CNY=CFXS +0.44 +2.77 <.SS 0.29 6.64
> EC>
India +0.12 +1.10 <.NS 0.00 -2.70
EI>
Indonesi +0.67 +4.67 <.JK 0.42 0.59
a SE>
Malaysia +0.64 +3.87 <.KL 0.17 -0.50
SE>
Philippi +0.98 +3.26 <.PS -0.80 6.29
nes I>
S.Korea <KRW=KFTC +0.98 +3.71 <.KS 0.73 10.34
> 11>
Singapor +0.17 +2.75 <.ST -0.43 3.43
e I>
Taiwan +0.93 +3.43 <.TW 0.92 10.07
II>
Thailand +0.12 +5.64 <.SE -0.13 0.89
TI>
(Reporting by Upasana Singh in Bengaluru; Editing by
Christopher Cushing)
