BENGALURU: Most Asian currencies were flat on Wednesday, ahead of a testimony from the US Federal Reserve Chair Jerome Powell while equities remained under pressure a day after the Chinese parliamentary session did not provide any stimulus measures.
Most currencies were largely unchanged while the Indonesian rupiah climbed 0.3%.
Market participants remained cautious ahead of congressional testimony from Fed Chair Jerome Powell which will be closely assessed for any clues on when rate cuts will happen in the United States.
Ken Cheung, chief Asia FX strategist at Mizuho Bank said that any remark deviating from the view of “no rush to cut rates” will introduce FX volatility.
Investors are also on the lookout for US jobs data for February due on Friday for further policy clues.
Most equities remained under pressure with shares in Malaysia and South Korea falling 0.3% each while those in the Philippines declined 0.4%.
In contrast, shares in Singapore rose more than 1% heading towards their best day since Feb. 16, and Taiwan stocks extended gains to a third session to hit another record high.
China’s parliament in its annual session on Tuesday set a widely expected growth target of 5% for 2024 and did not provide any stimulus measures as markets were hoping for.
“I think there is a bit of disappointment and we could be in a stage where markets are paring back because of that,” Wei Liang Chang, macro strategist (FX and Credit) at DBS Bank said.
Equities in China edged 0.1% higher while the yuan was trading flat.
Inflation in South Korea accelerated in February and came in above expectations. Inflation data from the Philippines on Tuesday also surprised to the upside.
The data “introduce a little bit of caution for Asian policymakers in terms of rate cuts”, Chang said.
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