Most Asian currencies began the new quarter on a negative
note after U.S. data showed higher prices hurting consumer spending, fueling
fears of an economic slowdown, while the Indonesian rupiah hit a more than
The Thai baht took the largest hit, losing 0.7% while India’s rupee
gave up 0.2% to hit a record low for the third time this week, trading
as low as 79.105 to the dollar.
U.S. consumer spending, which accounts for more than two-thirds of the
country’s economic activity, rose less than expected in May, as higher prices
led households to cut back. Inflation-adjusted consumer spending even showed a
Uncertainty over the economic outlook drove safe-haven flows to the
greenback, lifting the dollar index by about 0.3% and further pressuring
emerging Asian currencies.
“In general, the growing concerns over U.S. and global growth is keeping
pressure on Asian currencies,” said Alvin Tan, head of Asia FX strategy at RBC
The Philippine peso and Singapore dollar also gave up 0.4% and 0.2%,
The Indonesian rupiah slid 0.5%, hitting its lowest since May 2020
and trading at 14,970 to the dollar. The moves followed an inflation reading
that showed core inflation coming in below market expectations, even as the
headline figure breached the central bank’s target range.
Indonesia’s central bank governor said lower core inflation means it has
some flexibility to not hike rates in a rush.
Analysts at Goldman Sachs expected the Bank Indonesia to begin hiking as
early as July, and forecast 125 basis points of cumulative hikes over the rest
of the year.
“Some recent softening in the commodity outlook on global growth concerns
could be exacerbating market concerns over inflation in Indonesia,” analysts at
The South Korean won, however, gained 0.1% amid broader weakness.
RBC’s Tan said the move was likely down to strength in the Japanese yen,
as the two countries export similar goods, their currencies tend to be
correlated to some extent.
The weak U.S. data also weighed on the country’s yields and
Asian yields mirrored the moves.
Singapore’s 10-year benchmark yield dropped 6.5 basis points to
2.898%, while Indonesia’s was down 1.9 basis points at 7.230%.
Across Asia, manufacturing activity slowed in June due to supply disruptions
from China’s COVID-19 lockdowns, a series of surveys showed. China’s
manufacturing activity, however, expanded at its fastest pace in 13 months.
Stock markets in Asia were mostly in the red, with indexes in India
losing 1% and those in Indonesia down 0.9%. However, Philippine stocks
managed an 0.8% rise.
** New Philippines central bank governor Felipe Medalla takes office on
** Taiwan’s PMI contracts, Taiwanese stocks lose 2.9%, currency
Asia stock indexes and currencies
at 0213 GMT
COUNTRY FX RIC FX FX INDE STOCKS STOCKS
DAILY % YTD % X DAILY YTD %
Japan +0.47 -14.8 <.n2>
India -0.12 -5.98 <.ns ei>
Indonesi -0.47 -4.78 <.jk a se>
Malaysia -0.05 -5.54 <.kl se>
Philippi -0.43 -7.71 <.ps nes i>
Singapor -0.18 -3.11 <.st e i>
Taiwan -0.23 -7.07 <.tw ii>
Thailand -0.66 -6.04 <.se ti>
(Reporting by Harshita Swaminathan; Editing by Sam Holmes)