BENGALURU: Major Asian currencies and stock markets surged on Monday as the dollar declined and markets priced in early interest rate cuts in the United States and Europe, with investors waiting for key economic data from major countries in the region.
The dollar index which fell more than 1% last week to a six-week low, was trading little unchanged at 105.
The recent dollar slide, along with bets that local central banks would keep rates higher for some time, are making Emerging Asian currencies potentially interesting to foreign investors.
A slate of economic data from some major regional economies are expected to further set the tone for Asian markets in the week.
China will release its import and export figures for October on Tuesday and also bank lending and credit and key consumer price inflation(CPI) data on Thursday.
“Data-wise, Oct CPI and producer price index is still very much watched for any signs that deflationary forces remain at work due to demand deficit at home,” said Maybank analysts.
The analysts added signs of deflationary forces could possibly dampen the recent rally that Asian FX staged post the Federal Reserve meet and US non-farm payrolls data.
China’s yuan was muted in trading and was more or less unchanged. China’s shares surged 0.8% to a more than two-week high.
Analysts at Barclays expect the People’s Bank of China to continue to take a defensive stance and maintain a relatively stable USD/CNY.
Annual economic growth slowed more than expected in the third quarter to its weakest in two years, official data from the Indonesia, the largest economy in South-East Asia reported on Monday.
The rupiah surged 1.1% to 15540 and was set for its best day since March 24. Stocks in Jakarta gained 1%.
“The rupiah today is leaving its overshooting mode and lower than expected inflation should tone down the pressure on IDR,” said Fakhrul Fulvian, economist at Trimegah Securities.
Fulvian continues to see the USD/IDR pair trading at 15,500 by year adding that the country’s widening deficit is to be key risk in 2024.
The Philippines from Monday is allowing short-selling, a practice that seeks to profit off bets on a stock falling, two weeks behind the initial target, the bourse operator had said on Friday.
The peso gained 0.5% against the dollar while stocks in Manila surged 0.7%.
Thailand’s inflation rate fell for the first time in 25 months, reflecting lower energy prices due to government support measures and lower food prices, the commerce ministry said.
The baht was trading 0.2% higher while the Thai share gained 0.2%.
The Malaysian ringgit gained 1.5% against the dollar to hit its highest level since Sept.6 while the Singapore dollar added 0.3%.
Among stock markets, South Korea shares surged 4.1% after authorities re-imposed a ban on short-selling through the first half of 2024.