BENGALURU: Most Asian currencies were set for weekly losses on Friday, with the Philippine peso drifting to its lowest level in nearly four weeks and the Indonesian rupiah hovering near a record low, as stalled US–Iran peace talks underpinned the dollar.
Most stock markets in the region were headed for weekly gains after US President Donald Trump extended the ceasefire with Iran indefinitely, though stalled talks and the fragility of the truce kept investor optimism in check.
The MSCI gauge of EM Asia stocks inched higher and was on course for a third consecutive weekly rise. An MSCI gauge of global EM currencies inched lower and was anchored near its lowest since April 13.
The Philippine peso weakened 0.5 percent to 60.755 per dollar, its lowest since late March. The currency has lost nearly 2 percent so far this week, its worst performance in seven weeks.
The Philippine central bank raised its policy rate to 4.50 percent on Thursday to tame inflation. On Friday, the central bank said it was prepared to do “whatever was necessary” to contain inflation, leaving the door open to more interest rate hikes.
In Indonesia, the rupiah firmed slightly before paring gains, trading around 17,290 per dollar, not far from the record low of 17,320 touched on Thursday.
The rupiah has fallen around 0.6 percent this week, heading for its third consecutive week of losses and its worst since March 6.
“I think currencies among the most heavily oil import-dependent economies should continue to remain vulnerable – the likes of INR, IDR, PHP and THB, as we saw in the early days of the Iran conflict,” Galvin Chia, Asia EM strategist at Societe Generale, said.
“Among these, the first three twin deficit economies should screen relatively more vulnerable.”
Elsewhere, the Malaysian ringgit shed 0.3 percent to its lowest since April 13 and on course for its worst week since March 23. The Thai baht slipped to 32.555 per dollar, its lowest since April 7, and was on track for the steepest weekly fall since March 16.
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