BENGALURU: Asian emerging market assets advanced across the board on Wednesday, with the Indonesian rupiah and Malaysian ringgit climbing more than 1%, following a surprisingly soft US inflation reading and positive data from China.
The Indonesian rupiah and the Malaysian ringgit appreciated 1.4% and 1.2%, respectively, while the Taiwan dollar climbed 0.7%, to its highest level since Oct. 11, while the Philippine peso and the South Korean won gained about 0.5% each.
Equities in South Korea were the top gainers in the region, gaining more than 2%, while those in Thailand, Indonesia gained up to 1.7%. Shares in Taipei jumped 1.4% to their highest level since early August.
Softer-than-expected US inflation data for October has bolstered the view that the Federal Reserve has finished raising interest rates, pushing the dollar lower and providing relief to Asian currencies and equities.
Christopher Wong, an FX strategist at OCBC, said that as well as hopes the Fed might have concluded its tightening cycle, Asian currencies and equities also benefited from positive economic data from China, where retail sales and industrial output for October beat expectations.
“High-beta currencies and those currencies that are sensitive to China growth - the South Korean won and Malaysian ringgit - these are the currencies that will outperform a bit more on China data,” Wong said.
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