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EMERGING MARKETS-Asian FX slides on higher U.S. yields; Fed verdict eyed

* U.S. treasury yields rise after BoC rate hike * Fears loom that U.S. rates could stay higher for longer * Indian rupee flat after RBI holds rates By Riya Sharma June 8 (Reuters) - Most Asian currencies weakened on Thursday, with the dollar aided by rising U.S. yields on renewed fears that the Federal Reserve could maintain a hawkish stance when it meets next week, keeping rates higher for longer. The Thai baht was among the top losers in the region, falling 0.3% against the dollar. Equities also largely skidded lower, with stocks in Kuala Lumpur hitting a more than three-year low. U.S. Treasury yields jumped after the Bank of Canada (BoC) surprised markets on Wednesday by hiking its overnight rate, a move that came after the Reserve Bank of Australia (RBA) also raised interest rates earlier this week. The hawkish surprises from the BoC and the RBA fuelled expectations that the Fed might not be done raising rates despite the futures market pricing in a roughly 70% chance of a pause in June, OCBC Bank strategists said in a note. Markets are now pricing in a 69% chance of the Fed standing still next week, compared to 78% just a day earlier, CME's FedWatch tool showed. "Key takeaway this week was from RBA and BoC, where their policy actions suggest that pause is indeed not an end to tightening...reinforcing the notion that rates could stay higher for longer," said Frances Cheung, rates strategist at OCBC Bank. "(BoC's) decision reinforces views that we may still see additional tightening from the Fed after its June meeting," said Yeap Jun Rong, a Singapore-based market strategist at IG Asia. China's yuan reversed some losses after falling against the dollar to its lowest since November last year, on concerns over the country's economic outlook after May trade data released on Wednesday showed a slump in exports. Shares in Shanghai pared losses to climb 0.5%, while Hong Kong shares were flat after falling 0.9% earlier in the session. The Indian rupee was flat after the Reserve Bank of India's (RBI) key lending rate was held steady at a second straight policy meeting on Thursday, as widely anticipated. The improved near-term inflation outlook and resilient growth drove the decision, with the RBI expected to remain on hold for the rest of the fiscal year 2023-24, with an emphasis on macro stability, Barclays analysts said in a note. Meanwhile, Malaysia, the world's second-largest palm oil producer, is expected to experience weak El Nino conditions starting in June that could intensify to moderate levels by November, the country's environment minister said on Wednesday. Hot and dry weather caused by El Nino is bad for palm oil production. Malaysia could experience a crude palm oil production drop of between 1 to 3 million metric tons next year due to El Nino, the Malaysian Palm Oil Board said last month. The ringgit, which has lost 4.8% so far this year in its third consecutive annual decline, was down 0.4% on Thursday, leading the falls among its Asian peers. HIGHLIGHTS: ** Thai consumer confidence rose for a 12th straight month in May to stand at a 39-month high ** South Korea plans to discuss bilateral FX swap with Japan, finmin says Asia stock indexes and currencies at 0636 GMT COUNTR FX RIC FX FX IND STOCK STOCK Y DAILY YTD EX S S YTD % % DAILY % % Japan +0.18 -6.2 <.N -0.85 23.04 6 225 > China 4 SEC > India 7 SEI > Indone -0.17 +4.4 <.J 0.00 -3.37 sia 6 KSE > Malays -0.43 -4.6 <.K -0.39 -8.18 ia 6 LSE > Philip -0.02 -0.8 <.P -0.57 -0.59 pines 0 SI> S.Kore 1 S11 > Singap +0.09 -0.5 <.S -0.21 -2.41 ore 7 TI> Taiwan 2 WII > Thaila 5 ETI > (Reporting by Riya Sharma in Bengaluru; editing by Eileen Soreng)