BENGALURU: Most emerging Asian currencies rose against the US dollar on Thursday, as a less hawkish Federal Reserve added to bets that interest rates may have peaked, while Malaysia’s ringgit stuck to its previous gains after its central bank maintained status quo on rates.
The Bank Negara Malaysia (BNM) maintained its overnight policy rate (OPR) at 3.00% for the third consecutive time on Thursday.
The ringgit, which was up 0.4% earlier in the session, barely reacted to the BNM’s rate decision, and was set for its biggest gains since July 31. Malaysian stocks were up 0.3%.
Meanwhile, emerging Asian markets drew strength from positive sentiment in the US after the Fed held its key cash rate steady again.
Higher US rates have pushed investors away from risky Asian assets, and the yield differential has also caused Asian currencies to depreciate, but the 10-year US Treasury yield eased after the latest Fed policy meeting.
One of the worst-performing currencies in the region this year, the South Korean won rose as much as 1.1% on Thursday, making its highest intraday gains since Aug. 24.
“The won is a high beta (highly volatile) currency and very leveraged to global growth,” said Michael Wan, senior currency analyst at MUFG, adding the currency’s outperformance on Thursday was driven by positive sentiment in the US
South Korea’s consumer inflation rose for a third month in October on the back of high food prices, data on Thursday showed.
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