SINGAPORE: South Korea's won was the biggest loser on Monday as a modest recovery in the US dollar pulled emerging currencies across Asia lower ahead of a week likely to be dominated by the US Federal Reserve's annual Jackson Hole gathering. Some of the foreign exchange market's big players have begun to suggest the dollar's slide since May may be overdone and upbeat US data on Friday, along with signs of progress on coronavirus vaccines, have reinforced that view.
The won slipped as much as 0.5% after South Korea's central bank chief warned that a recent surge in coronavirus infections will likely weaken its economic recovery. Indonesia's rupiah, the Malaysian ringgit and Singapore dollar all traded flat to lower against the dollar, while the Taiwanese dollar was the sole gainer, up about 0.5%.
Bank of Korea holds its monetary policy meeting on Thursday, with analysts at Goldman Sachs expecting the central bank to keep its key policy rate steady at a record low of 0.5%. Gains in pharmaceutical shares, however, pushed Seoul's stock market up about 1%.
Fed chair Jerome Powell will address on Thursday the Jackson Hole gathering, being held virtually due to the coronavirus, with investors also eagerly awaiting details on possible changes to how the Fed targets inflation. Policymakers' concern about the pace of recovery in minutes from the central bank's July meeting pushed stocks and most emerging markets lower last week but business surveys on Friday were more encouraging.
The Philippines, resuming trade after a long weekend, reported its smallest daily rise in new coronavirus infections in a month on Sunday, but the nationwide tally was still the highest in Southeast Asia. Malaysia's 10-year benchmark yield is up 2.3 basis points at 2.556%, while its 3-year benchmark yield is up 2 basis points at 1.842%.
Top gainers on the Thailand's SETI Thailand Hospitality Property Fund up 13.29% at 9.8 baht, Asiasoft Corporation PCL up 11.11% at 4.2 baht. In the Philippines, top index losers are JG Summit Holdings Inc down 2.13% at 62.1 peso; Alliance Global Group Inc down 2.1% at 6.07 peso; SM Investments Corp down 2% at 882 peso.
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