Asian FX, stocks rise after Powell’s less hawkish testimony

BENGALURU: Most emerging Asian stock and currency markets rose on Wednesday after the U.S. Federal Reserve chairman said it would take the central bank some time to unwind its balance sheet, with the South Korean won jumping for a third consecutive session. The Thai baht, Indonesia’s rupiah and the Malaysian ringgit rose 0.1% to 0.3%, while stock markets in South Korea, Jakarta and Taiwan climbed between 0.3% and 1.3%.

The U.S. dollar retreated overnight after Jerome Powell, at his re-nomination hearing for a second term as the Fed chairman, did not provide any new details on interest rates, while adding that he believed the economy could handle tighter monetary policy. But he said policymakers were still debating approaches to reducing the central bank’s balance sheet, which could take two, three or four meetings to decide.

“While Powell didn’t really push back on market pricing around expected Fed rate hikes, we’ve certainly seen relief play out across markets,” Chris Weston, head of research at brokerage Pepperstone, wrote in a note.