Asian currencies: Thai baht rallies to near 6-month high

BENGALURU: Stock markets in emerging Asia fell on Wednesday, snapping a four-day winning streak, as US curbs on some Nvidia chip exports to China amplified trade tensions between the top economies.

Among currencies, the Thai baht surged as much as 33.22 per US dollar for the first time since October 21, 2024, driven by a softer greenback, record high gold prices and China’s better-than-expected economic growth in the first quarter.

Thailand is a major gold trading hub in the region, and its currency is closely linked to the commodity’s price.

“The outperformance in the baht should be contributed by surging gold prices,” said Poon Panichpibool, a markets strategist at Krung Thai Bank.

Analysts, however, remain cautious about short-term rallies in the baht as a correction in gold prices could pressure the currency. An escalation in the US-China trade war and the knock-on effect of a weakening yuan could also dampen other emerging Asian currencies.

Panichpibool said the baht remained under pressure due to a weak tourism season, ongoing trade tensions and dividend repatriation by foreign investors.

In China, solid first-quarter growth data did little to boost domestic assets, with the onshore yuan slipping marginally and stocks falling.

China is Southeast Asia’s biggest trading partner and a top investment source whose fortunes dictate growth in the developing region.

Most other emerging currencies appreciated against a subdued dollar, with the greenback clinging to mid-July lows touched last week against a basket of its peers.

The Singapore dollar and the Philippine peso firmed 0.3%, while Malaysia’s ringgit moved in a tight range around its one-week high. Indonesia’s rupiah ticked lower to 16,838 a dollar.

An MSCI index of world emerging market currencies was slightly lower, largely weighed down by Latin American currencies that weakened against the dollar overnight. A gauge of those currencies slipped 0.3%.

In equities, the MSCI index of Asian emerging market stocks

fell as much as 1.8% to snap a four-day streak. A gauge of ASEAN stocks - dominated by Southeast Asian firms - also fell slightly. Tariff volleys between the United States and China have traders fretting about global economic growth, with President Donald Trump’s ever-changing policies adding to the uncertainty.

“Choppiness in markets looks to continue as the trade negotiations come underway together with the risk of more US trade restriction announcements,” analysts at Maybank said.