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

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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

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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


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

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chipmaker shares buoyed the country’s benchmark stock index

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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

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to meet next week amid strong second-quarter growth and soaring


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


“We expect the economy to strengthen further in 2H, driven

by a wider reopening from July,” Chua Han Teng, economist at DBS

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“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

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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.


** 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%,


Asia stock

indexes and


at 0713






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




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