BENGALURU: Most Asian currencies and stocks were subdued on Wednesday as investors awaited the US Federal Reserve policy outlook for 2026, while the Indonesian rupiah slipped on reports a trade deal with the United States might be at risk of collapsing.
The rupiah eased as much as 0.2 percent to 16,693 per dollar. It has weakened about 3.5 percent so far this year, making it one of the worst performers in Asia.
Among other currencies in the region, the Malaysian ringgit edged down 0.5 percent, while the Philippine peso inched marginally higher.
A US official said on Tuesday that a trade agreement reached with Indonesia in July was at risk of collapsing after Jakarta allegedly backtracked on several commitments.
In response, an Indonesian government official said on Wednesday that tariff talks were continuing, with no specific problems emerging during the negotiations.
Investor sentiment towards Indonesian assets has stayed broadly positive, underpinned by stronger government support, including a 16.23 trillion rupiah (USD972.73 million) stimulus, liquidity for state banks and an improving growth outlook.
Equities in Jakarta, which have hit multiple record highs over the last two weeks, rose 0.3 percent.
“I believe the market is more immune to the noise from the trade deal unless there is more visibility on the potential impact,” said Ernest Chew, head of ASEAN equities at BNP Paribas Asset Management.
“Investors remain constructive on Indonesia because the domestic backdrop is still doing a lot of heavy lifting.”
Among stock markets, Malaysia and Singapore declined 0.3 percent and 0.2 percent, respectively.
With markets pricing in a more than 89 percent probability of a 25-basis-point Fed interest rate cut later in the day, the spotlight is squarely on its outlook for 2026.
This week’s Fed meeting has shaped up as one of the most contentious in years, with five of the 12 FOMC voters already signalling opposition or scepticism toward further easing.
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