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EMERGING MARKETS-Asian FX subdued on recession fears, Thai baht gains on H2 growth outlook

·3-min read

* Most Asian FX down on renewed global recession worries * S. Korean won falls 0.6%, but Thai baht firms 0.4% * Safe-haven bid props up dollar after China, U.S. data disappoints By Indranil Sarkar Aug 16 (Reuters) - Most Asian currencies weakened on Tuesday, a day after grim data from the world's two biggest economies reignited worries about a global recession, while the Thai bhat advanced after the country's central bank forecast a rebound in second-half growth. The Indonesian rupiah, Malaysian ringgit and the Taiwan dollar weakened between 0.1% and 0.2% against the U.S. dollar, which hovered near a one-week high on safe-haven demand. "Asian markets may range trade today as investors continue to digest the recent soft economic data coming out from both China and the U.S., and their implications for policy stimulus," analysts at OCBC Bank wrote. Monday's underwhelming Chinese activity data spanned industrial output, retail sales and real estate, which was followed by frail U.S. single-family homebuilders' confidence and weakness in a New York state factory activity survey. This sent the onshore yuan to as much as 0.5% lower to touch 6.7950 per dollar, its weakest level since May 16. Resuming trade after a public holiday, the South Korean won led the fall in the region with a 0.6% decline and was on track for its worst day in over a week. But a boost to chipmaker shares buoyed the country's benchmark stock index to its highest level in nearly two months. "Concerns over moderating external demand is likely to remain intact in the interim, given traction by softer data out of China and the U.S.," analysts at Maybank wrote. The rupiah extended losses for a second day after the country's statistic bureau on Monday warned that its windfall export earnings, which heavily benefited from high commodity prices, may start dwindling despite larger-than-expected surplus in July. The local currency has firmed 0.5% in August so far on a nascent economic recovery. It had lost over 4% in the first seven months of 2022. Indonesia is also one of the few laggards in the region that is yet to begin monetary tightening, with its central bank set to meet next week amid strong second-quarter growth and soaring inflation. Bucking the broader trend, the Thai baht rose 0.4% after the country's central bank said that the domestic economy was expected to continue growing in the second half of the year as tourism picks up, despite a weaker-than-expected second quarter. "We expect the economy to strengthen further in 2H, driven by a wider reopening from July," Chua Han Teng, economist at DBS said. "Private consumption and tourism, already rising, are set to gather additional momentum." The peso gave away its early gains to inch 0.1% higher as the country's central bank was set to deliver a half-point point rate rise on Thursday, a Reuters poll showed. The Bangko Sentral ng Pilipinas (BSP) was also widely expected to hike rates by a quarter-point in September to catch up with its peers in containing soaring inflation. That would add to the hefty unscheduled 75 basis point rise in July, its most aggressive since the central bank shifted to an inflation-targetting approach in 2002. HIGHLIGHTS ** Indonesian 10-year benchmark yields are up 3.2 basis points at 7.081%​​ ** Leading gains in KOSPI are Samsung Electronics and peer SK Hynix, up 1.3% and 3.6%, respectively Asia stock indexes and currencies at 0713 GMT COUNTRY FX FX FX INDE STOC STOC RIC X KS KS DAILY YTD % % DAIL YTD Y % % Japan 89 25> 1 China 8 EC> 4 India 9 EI> Indonesia 5 SE> Malaysia 4 SE> 1 Philippines 0 I> 2 S.Korea 2 11> 92 Singapore 2 I> 1 Taiwan 1 II> 36 Thailand 6 TI> 8 (Reporting by Indranil Sarkar in Bengaluru; Editing by Rashmi Aich)