*
Singapore's Jan core inflation rises 5.5%
*
Bank of Korea keeps interest rate steady
*
Won rises 0.6%, Singapore dollar down 0.1%
By Himanshi Akhand Feb 23 (Reuters) - Singapore's dollar reversed early gains on Thursday after the city state's consumer price gauge rose at the fastest pace in more than 14 years in January.
Most other emerging Asian currencies, though, inched up as the greenback ceded gains after the U.S. Federal Reserve's last meeting reinforced a hawkish tone.
The Singaporean dollar appreciated as much as 0.2% earlier in the session and was last down 0.1%. Stocks were down 0.8%. Analysts were split over the direction Monetary Authority of Singapore's (MAS) monetary policy this year as the consumer price gauge rose 5.5% but stayed lower than the forecast.
"While core services inflation could remain sticky at an elevated level in 2023, we expect lower utilities and goods inflation to push MAS core inflation lower from here as growth slows and cost-push pressure eases," analysts at Goldman Sachs wrote.
They forecast MAS keeping policy settings on hold this
year.
In contrast, analysts at Maybank said there was an
increasing likelihood of core inflation exceeding the current
MAS forecast range.
"Given elevated core inflation, we expect the MAS to
tighten again at the April 2023 meeting, probably via another
re-centering," Maybank analysts added.
Other regional currencies were higher with the
Philippine peso , the Malaysian ringgit and the
Indonesian rupiah advancing between 0.1% and 0.3%.
The dollar retreated from its multi-week highs as
markets digested that Federal Reserve is likely to stay on its
aggressive rate-hike path, after minutes from its last policy
meeting reinforced the hawkish rhetoric. The minutes indicated that curbing unacceptably high
inflation would be the "key factor" in how much more rates need
to rise even as nearly all Fed policymakers rallied behind a
decision to further slow the pace of rate hikes.
"The FOMC minutes were nowhere in the vicinity of inciting
'Powell pivot' bets; comprising risk asset boost amid falling
UST yields and USD," Vishnu Varathan, head, economics & strategy
at Mizuho Bank, wrote.
Meanwhile, South Korea's central bank held interest rates
steady and said the monetary tightening campaign it began 18
months ago would not resume if inflation followed an expected
path towards moderation.
The won strengthened 0.6%, while stocks in Seoul gained over 0.9%.
Equities in the region were mixed with stocks Indonesia advancing 0.3%, while those in Thailand and
Malaysia retreated 0.5% and 0.3%, respectively.
HIGHLIGHTS
** Investors returned to placing bearish bets on all Asian
currencies on the increasing likelihood that the U.S. Federal
Reserve would continue hiking rates for longer, a Reuters poll
found
** Malaysia's consumer price inflation data for January due
Friday
Asia stock indexes and currencies
at 0731 GMT
COUNTRY FX RIC FX FX INDE STOCKS STOCKS
DAILY % YTD % X DAILY YTD %
%
Japan +0.01 -2.80 <.N2 - -
25>
China <CNY=CFXS -0.01 +0.14 <.SS -0.11 6.42
> EC>
India +0.10 -0.06 <.NS -0.11 -3.15
EI>
Indonesi +0.07 +2.47 <.JK 0.28 -0.31
a SE>
Malaysia +0.20 -0.68 <.KL -0.31 -2.41
SE>
Philippi +0.25 +1.20 <.PS -0.20 1.82
nes I>
S.Korea <KRW=KFTC +0.60 -2.51 <.KS 0.89 9.06
> 11>
Singapor -0.09 -0.13 <.ST -0.80 0.69
e I>
Taiwan +0.36 +1.03 <.TW 1.28 10.45
II>
Thailand +0.12 +0.01 <.SE -0.45 -0.99
TI>
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Graphic: World FX rates Asian stock markets ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Himanshi Akhand in Bengaluru; Editing by Janane Venkatraman)
