Asian currencies: S Korea won, Taiwan dollar hit multi-month lows

BENGALURU: Stocks in Taiwan surged to a record high amid higher inflows into Asian equities on Tuesday, while most regional currencies weakened against the dollar as strong economic data reinforced bets against earlier US rate cuts.

Taiwan’s benchmark index rose 1% to a record high of 20,451.790 points. The Philippine main shares index jumped 1%, hitting its highest level since Jan. 27, 2023.

“In Taiwan and South Korea, the equity markets are very tech focused and a global equity bull market has been driven by the tech sector particularly in Taiwan and Korea,” said Alvin Tan, who heads Asia FX strategy at RBC Capital Markets.

“But that’s obviously not helping Taiwan dollar or even the South Korean won and that’s because the US dollar is basically strong right across the board,” Tan noted.

Traders dialled back expectations of Federal Reserve rate-cuts after data on Monday showed US manufacturing grew for the first time in 1-1/2 years last month due to a production rebound and increased new orders.

The robust data sent the benchmark US 10-year Treasury yield to as high as 4.337%, its strongest level since March 18.

This underpinned the US dollar’s climb on Tuesday. The index that measures the strength of greenback against rival currencies rose by 0.3% to 105.02.

Meanwhile, the MSCI index for emerging markets currencies fell by 0.3%.

In Asia, the Taiwanese dollar depreciated 0.3% to its lowest since Nov 16. The Malaysian ringgit slipped 0.4% to a four-week low. The South Korean won also dipped 0.2% and touched its lowest level in five months.

Consumer prices in South Korea last month rose 3.1%, matching market expectations and the previous month’s pace.