Global growth worries, weak domestic data keep Asian currencies in check

-A +A

BENGALURU (Jan 24): Most Asian currencies were hemmed into tight trading ranges on Thursday as concerns over slowing global growth and a slew of lukewarm domestic data from major regional economies kept investors' appetite for riskier assets in check.

Adding to the cautius mood were mixed signals on the progress of trade talks between United States and China, making investors wary about the prospects for an amicable solution before an early March deadline.

The Indonesian rupiah, which has appreciated about 1.6% so far this year, was the only relatively better performer on the day, advancing up to 0.3% to its best level against the dollar in a week.

The Malaysian ringgit, the Indian rupee, the Taiwan dollar, the Thai baht and the Chinese yuan were all confined to narrow ranges.

The Philippine peso weakened as much as 0.3% after data showed that the Southeast Asian country's economic growth slipped to the lowest pace in three years in 2018, though it edged up in the fourth quarter, giving the central bank little reason to resume hiking interest rates.

"The Philippines' 2018 growth is likely to moderate to a three-year low as elevated inflation dampens domestic demand in addition to fading favourable external tailwinds," Mizuho Bank said in a note on Thursday.

MALAYSIAN RINGGIT

The ringgit dipped ahead of a Malaysian central bank policy decision later in the day.

It is expected to keep its benchmark overnight interest rate unchanged at 3.25%, a Reuters poll showed.

The central bank's last move was a year ago, when it raised the rate by 25 basis points.

Meanwhile, government data on Thursday showed Malaysia's consumer price index rose 0.2% in December from a year earlier, matching the pace in November.

December's annual inflation rate was below the 0.4% forecast by a Reuters poll.

KOREAN WON

South Korea's currency dipped in response to the Bank of Korea's dovish tone on the economy after it left benchmark interest rates steady, reinforcing market bets that rates will remain at the current level for some time amid worsening trade conditions.

The Bank of Korea ended its first policy rate meeting of the year with the base rate unchanged at 1.75%.

A Reuters poll of 11 economists had expected the central bank to keep policy unchanged after it raised rates in November for the first time in a year.

Investors will focus on the central bank's expected revisions to its growth forecasts later in the day, as well as Governor Lee Ju-yeol's comments on the economy for clues on future policies.

The following table shows rates for Asian currencies against the dollar at 0508 GMT.

CURRENCIES VS US DOLLAR

Currency               Latest bid  Previous day  % move
Japan yen              109.540     109.59        +0.05
Sing dlr               1.359       1.3587        -0.02
Taiwan dlr             30.880      30.892        +0.04
Korean won             1128.900    1127.3        -0.14
Baht                   31.720      31.73         +0.03
Peso                   52.750      52.64         -0.21
Rupiah                 14150.000   14175         +0.18
Rupee                  71.270      71.34         +0.09
Ringgit                4.136       4.135         -0.02
Yuan                   6.786       6.7910        +0.07

Change so far in 2019

Currency               Latest bid  End 2018      % move
Japan yen              109.540     109.56        +0.02
Sing dlr               1.359       1.3627        +0.27
Taiwan dlr             30.880      30.733        -0.48
Korean won             1128.900    1115.70       -1.17
Baht                   31.720      32.55         +2.62
Peso                   52.750      52.47         -0.53
Rupiah                 14150.000   14375         +1.59
Rupee                  71.270      69.77         -2.10
Ringgit                4.136       4.1300        -0.15
Yuan                   6.786       6.8730        +1.28