BENGALURU: Most Asian equities markets continued a bullish run on Tuesday on the back of renewed bets for US rate cuts after last week’s cooler-than-expected jobs data, while the region’s currencies were subdued despite a slightly weaker dollar.
The Indonesian rupiah fell 0.2%, losing the ground it gained on Monday after data showed the country’s economy in the first quarter grew at its fastest pace in three quarters.
The Philippine peso was largely unchanged after country’s annual inflation increased for a third straight month in April, backing the central bank’s recent decisions to keep monetary policy restrictive.
Regional markets are still cautious about the future path of US interest rates as they have not seen a strengthening in Asian currencies even with US yields falling, said Lloyd Chan, senior currency analyst at MUFG Bank.
“The dollar is still attractive. It has a relatively higher carry compared to many Asian currencies, and the rate differentials is in favour of the US and continues to weigh on the (regional) currencies,” Chan added.
The Thai baht and the Taiwanese dollar each fell by 0.2%. Taiwan is scheduled to report its April inflation numbers later on Tuesday.
Bucking the regional trend, the South Korean won was 0.3% higher.
Meanwhile, Asian stocks continued their rally on optimism from the Federal Reserve hinting at a dovish bias after last week’s slower-than-expected job growth in US, which reinforced bets on rate cuts later in the year.
Interest rates markets price at least one US rate cut this year, in November.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.3%.
South Korean stocks surged as much as 2% after returning from a holiday on Monday, tracking Wall Street gains overnight.
Taiwan shares rose as much as 0.8%, while stocks in Indonesia added as much as 0.3%.
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