*
Thailand 2023 growth seen at 2.7-3.7% vs 3.0-4.0% earlier
*
Malaysian ringgit set for worst week since 2020
*
All stocks in the region fall
By Tejaswi Marthi Feb 17 (Reuters) - Asian currencies extended losses on Friday, as the U.S. dollar climbed to a six-week peak after a slew of strong economic data re-ignited fears that the Federal Reserve would continue hiking interest rates in the future. The currencies, which started off the year on a strong note, came under pressure as high U.S. inflation, soaring consumer prices and an acceleration in monthly producer prices signalled that the Fed would keep rates higher for longer.
The Malaysian ringgit led losses among its peers to shed 0.6% and also hit a more than one-month low. It has fallen 2.3% so far in the week, its sharpest since the pandemic began. The Singapore dollar and the Indian rupee dipped 0.2% and 0.1%, respectively, both marking their lowest levels since Jan. 6. Investor sentiment was also weighed down by comments from two Fed officials that the U.S. central bank likely should have lifted interest rates more than it did early this month, and that additional increases in borrowing costs were essential to get inflation down to desired levels. "The rally in local markets has taken a pause as stronger-than-expected US growth-inflation dynamics have revived concerns over an extended rate-hike cycle. In our view, they are insufficient conditions to derail local markets performance in a more durable manner," analysts at ANZ wrote in a client note. The Thai baht also extended losses, falling 0.4%, after Thailand's economic growth only expanded 1.4% in the October-December period from a year earlier, hurt by a dip in exports and manufacturing.
That compared with a 3.5% year-on-year rise forecast in a Reuters poll and revised 4.6% growth in the September quarter. On a quarter-on-quarter basis, the economy unexpectedly contracted.
"Weaker-than-expected GDP reading could prompt some foreign investors to reduce their long positions or take profits, especially when their FX profits have been reduced by 50% lately from a sharp depreciation in the baht," said Poon Panichpibool, a market strategist at Krung Thai Bank. Economies are conventionally judged to be in recession if gross domestic product contracts in two successive quarters, but Thailand's planning agency said growth would return in January-March, thanks in part to strengthening tourism. "Foreign tourism will definitely mitigate impacts from weakness in exports, with influx of Chinese tourists likely to drive more tourism revenues from the second quarter," the Krung Thai Bank strategist said.
Equities in the Philippines skidded 0.9%, marking their worst day in two weeks, while stocks in Thailand and Singapore fell 0.4% each.
HIGHLIGHTS:
** Indonesian 10-year benchmark yields fall to 6.721%
** Philippine c.bank sees 25- or 50-bp rate hike in March
** Japan's core consumer prices likely accelerated to a more
than 41-year high in January, a Reuters poll of 19 economists
showed
Asia stock indexes and currencies at 0623 GMT
COUNTRY FX RIC FX FX INDE STOCKS STOCKS
DAILY % YTD % X DAILY YTD %
%
Japan -0.60 -2.70 <.N2 -0.66 5.44
25>
China <CNY=CFXS -0.31 +0.34 <.SS -0.09 5.08
> EC>
India -0.10 -0.10 <.NS -0.30 -0.69
EI>
Indonesi -0.24 +2.47 <.JK -0.28 0.37
a SE>
Malaysia -0.59 -0.63 <.KL -0.53 -1.28
SE>
Philippi -0.14 +0.81 <.PS -0.90 2.87
nes I>
S.Korea <KRW=KFTC -1.12 -2.69 <.KS -0.95 9.63
> 11>
Singapor -0.29 -0.01 <.ST 0.39 2.24
e I>
Taiwan -0.39 +1.02 <.TW -0.46 9.49
II>
Thailand -0.42 +0.28 <.SE -0.37 -0.99
TI>
(Reporting by Tejaswi Marthi in Bengaluru; Editing by
Subhranshu Sahu)
