*
Thai baht set for worst week since 2021
*
Indonesia's rupiah on track for 1.7% drop this week
*
Malaysian Q4 GDP beats expectations
By Upasana Singh Feb 10 (Reuters) - Most Asian currencies were set to post weekly losses on Friday against a firmer dollar, while stocks in the region were trading broadly lower as worries over the likelihood of further U.S. interest rate hikes dampened risk sentiment.
Thailand's baht , which has gained 2.7% so far this year, was set to post its worst week since late-November 2021. The unit depreciated 0.3% on Friday. The Indonesian rupiah and the Philippine peso were on track for a more than 1.5% decline this week. The rupiah fell 0.3% on Friday while the peso eased 0.1%. Malaysia's economy outperformed expectations in the fourth quarter, partly due to strong domestic demand, and the central bank said it expected the country to avoid a recession amid a global slowdown. Its gross domestic product (GDP) for 2022 was 8.7% higher than the prior year, the fastest full-year growth in 22 years and also surpassed the government's forecast range of 6.5% to 7%.
The data comes after Bank Negara Malaysia last month unexpectedly kept its benchmark interest rate unchanged, flagging risks to economic growth after four consecutive rate hikes in 2022. "With today's GDP print, Bank Negara Malaysia's decision to keep the policy rate on hold at their last monetary policy meeting seems appropriate and more so as the full effects of the previous policy rate hikes are yet to take full effect," analysts at ANZ said in a note.
Malaysia's ringgit slipped 0.4% and was on track for a 1.7% drop for the week. Equities in Kuala Lumpur rose 0.5%.
Investors remain cautious over the future pace of monetary
policy tightening by the U.S. Federal Reserve following hawkish
comments from several Fed speakers on Thursday. Markets now
await U.S. inflation data due next week.
"FX moves remained caught in a recent range, but we opine FX
markets may trade slightly defensive, with risk proxies, such as
AUD, AxJs (Asia ex-Japan) under slight pressure," OCBC analysts
said in a note.
"Focus is still on U.S. CPI (consumer price index) next
Tuesday as it should offer some guidance on U.S. dollar
direction in the near term."
The dollar index was up 0.1% at 103.26, as of 0713
GMT, having dropped 0.24% in the previous session. U.S. Treasury yields have been on a climb recently, as
investors adjust for the likelihood of further policy tightening
from the Fed. The benchmark 10-year yield hit 3.692% on
Wednesday, the highest since Jan. 6. Among stock markets, equities in Jakarta retreated
1.2% to lead regional losses. Seoul shares , Singapore
equities and stocks in Bangkok dipped between
0.1% and 0.5%.
Central bank officials in the Philippines and Indonesia are
scheduled to meet next week. Analysts at Barclays expect Bangko
Sentral ng Pilipinas to raise interest rates by 25 basis points,
while Bank Indonesia is likely to stand pat.
Singapore's government will announce its 2023 budget on Feb.
14.
HIGHLIGHTS:
** China's January factory gate prices fell more than
economists had expected, while consumer price index in January
was 2.1% higher than a year earlier
** Index provider MSCI said it will cut the weightings of
four Adani Group companies, including flagship firm Adani
Enterprises
** South Korea's finance minister reaffirmed his view that
consumer prices would ease around April-May, a week after data
showed the country's annual inflation had unexpectedly ticked up
in January
The following table shows rates for Asian currencies against
the dollar at 0707 GMT.
COUNTRY FX RIC FX FX INDEX STOCKS STOCKS
DAILY % YTD % DAILY YTD %
%
Japan +0.05 -0.29 0.31 6.04
China <CNY=CFXS -0.21 +1.49 -0.29 5.56
>
India -0.06 +0.19 -0.31 -1.48
Indonesi -0.33 +2.81 -1.18 -0.51
a
Malaysia -0.35 +1.69 0.52 -1.56
Philippi -0.07 +2.17 0.50 4.73
nes
S.Korea <KRW=KFTC -0.38 -0.06 -0.48 10.43
>
Singapor -0.07 +1.02 -0.10 3.22
e
Taiwan -0.22 +1.90 -0.08 10.25
Thailand -0.27 +2.72 -0.28 -0.25
(Reporting by Upasana Singh in Bengaluru; Editing by Sherry
Jacob-Phillips)
