April,17(Agencies) ——Asian currencies took broadly dip against a firmer dollar on Monday, expecting US Federal Reserve interest rates hike.
South Korean won fell below 1% in its biggest single-day dip within two weeks, whereas Malaysian ringgit , Indonesian rupiah and Thai baht weakened between 0.4% and 0.5%.
Last week data showed a resilience in core US retail sales and a rise in short-term inflation expectations that led markets to re-calibrate the likelihood of a Fed hike at its next meeting.
Money markets are now pricing in an 81.4% chance the Fed will hike rates by 25 basis points next month, compared to a 69% chance last week.
A slew of Chinese economic data due on Tuesday will provide some insight on how the end of China’s strict zero-COVID curbs have helped the recovery in the world’s second-largest economy. Chinese blue chips added 0.8%, while the broader index rose 0.9%.
Last week, China reported an unexpected surge in its exports for March, but analysts have cautioned the improvement partly reflects suppliers catching up with unfulfilled orders after last year’s COVID-19 disruptions.
The rupiah and stocks in Jakarta were both weaker, ahead of Bank Indonesia’s policy meeting on Tuesday.
Central bank is set to keep its key interest rate unchanged at 5.75% for a third consecutive meeting, according to a Reuters poll.
If Indonesia pulls the brakes on rate hikes, it would join emerging markets such as South Korea, Singapore and India that have recently paused sustained policy tightening campaigns as growth concerns take precedence over high inflation. “While the Fed is likely to keep raising its policy rate this year, BI is primarily focused on core inflation, not the IDR, in its post-pandemic normalisation cycle,” analysts at Barclays said in a note.
“Overall, we now expect BNM (Bank Negara Malaysia) and BSP (Bangko Sentral ng Pilipinas) to be the only central banks in emerging Asia left with more rate hikes in them – with the BoT (Bank of Thailand) possibly also staying in this list.”
Shares in the region were also largely downbeat. Stocks in Manila, Kuala Lumpur and Seoul fell between 0.2% and 0.7%.
Meanwhile, Singapore’s March non-oil domestic exports shrank 8.3%, though the drop was smaller than the previous month and less than forecast.
Pakistan Rupee Exchange Rate