BENGALURU: Asian currencies held steady and stock markets traded mixed on Monday as investors braced for a meeting between US President Donald Trump and his Ukrainian counterpart Volodymyr Zelenskiy, and the Federal Reserve’s Jackson Hole symposium.
Malaysia’s ringgit and the Taiwan dollar shed 0.2% and 0.1%, respectively, while other currencies in the region were largely subdued.
The dollar index edged higher, recovering from last week’s decline as traders scaled back bets on a jumbo Fed rate cut next month.
The Kansas City Federal Reserve’s Jackson Hole symposium through August 21-23 is the week’s main event, where Chair Jerome Powell is set to outline the Fed’s economic outlook and policy framework.
Markets are now pricing in an 84.2% chance of a quarter-point Fed rate cut next month, and are priced for more easing by December.
ANZ strategists said Powell is unlikely to be as candid as last year when he made the case for imminent rate cuts.
“Our base case remains that the Fed will cut rates at its September meeting,” they said in a note.
Market focus for the day is on the Trump-Zelenskiy meeting as Washington presses Kyiv for a swift peace deal to end the Ukraine war.
Equities in Southeast Asia traded mixed, with Singapore down 0.8%. Thailand shed 0.4%, while Taiwan advanced 0.6% to a record high.
South Korean shares slumped 1.3%, with chip stocks leading the decline following reports US President Donald Trump would unveil tariffs on semiconductor imports in coming weeks.
“While broader sentiments remain supportive on expectations that the Fed may cut rate at its next meeting, there are concerns on sectoral tariffs – pharmaceuticals, semiconductors and even metals,” said Christopher Wong, currency strategist at OCBC.
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