Most Asian markets were closed on Monday for the Labour Day holiday. While onshore trading in the yuan remained closed, the offshore yuan fell 0.5% on Monday, and largely stuck to those levels on Tuesday.
The offshore yuan was last seen at 6.9526 to the dollar. Other Asian currencies such as the Thai baht and Indonesian rupiah fell 0.1% and 0.2% respectively. Other currencies moved between 0.1% higher and 0.1% lower.
"EM (emerging market) Asia currencies could see some softening bias because China reopening momentum would be quite important to anchor the EM Asia currencies," said Ken Cheung, chief Asia FX strategist at Mizuho Bank.
Indonesia reported a headline inflation of 4.33% for April, below market expectations and a slight slowdown from March. Core inflation, which excludes government-controlled prices and volatile food prices also slowed down.
The rupiah did not react much to the CPI data release.
"With core inflation likely to remain benign, we see scope for BI (Bank Indonesia) to turn opportunistic in cutting the policy rate to support the economy after the Fed’s hiking cycle is over," analysts at Barclays said. The Philippine peso was an outlier, strengthening 0.4%. The country said its budget deficit widened to 210.3 billion pesos in March.
Late on Wednesday, the U.S. Federal Reserve is expected to deliver a 25 basis points hike. The country has seen three mid-sized bank failures so far this year, with First Republic Bank's assets seized by regulators and sold to JPMorgan late on Monday.
Cheung said the buyout by JPMorgan "largely cleared the hurdle" for the Fed to deliver another 25 basis point hike.
Markets also weigh possible impacts from the U.S. debt ceiling crisis, with the Treasury warning the government may default on payments next month. U.S. President Joe Biden will meet four congressional leaders next week to discuss the matter. Stock markets in Asia trended higher, with nearly all major indices in green. Stocks in South Korea rose the most at 0.9%, while those in Taiwan and Malaysia rose about 0.4% each.
HIGHLIGHTS:
** Thailand exports likely to rise 1% this year, Thai
shippers' council says
** Biden tells Philippines' Marcos that U.S. commitment to
the defence of its ally was "ironclad" amid China pressure
** Singapore's DBS Group reports record Q1 profit,
says uncertainty over global economy drove safe-haven inflows
0636 GMT
COUNTRY FX RIC FX FX INDEX STOCKS STOCKS
DAILY YTD % DAILY YTD %
% %
Japan -0.08 -4.71 0.12 11.74
India +0.06 +1.15 0.52 0.29
Indonesia -0.20 +5.92 -1.21 -0.28
Malaysia +0.02 -1.28 0.37 -4.97
Philippines +0.34 +0.65 0.33 1.22
S.Korea -0.33 -5.78 0.91 12.88
Singapore +0.07 +0.34 0.18 0.77
Taiwan -0.15 -0.25 0.37 10.60
Thailand -0.09 +1.23 -0.36 -8.69
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic: World FX rates Asian stock markets ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Harshita Swaminathan; Editing by Nivedita
Bhattacharjee)
