BENGALURU: Emerging Asian currencies struggled for momentum on Thursday and most stock markets fell as investors chose to book profits ahead of a long holiday weekend, while the US dollar firmed after hawkish comments from a Federal Reserve official.
The South Korean won advanced 0.2%, a day after sliding to its lowest level since November. The Indonesian rupiah was last down 0.1%, remaining at its lowest level in nearly five months.
The US dollar index, which measures the strength of the greenback against six major rivals, ticked up after Fed Governor Christopher Waller signalled there was no rush to cut the policy rate because of the unexpectedly strong inflation data this year. It was last up 0.1% at 104.490.
Japan’s yen was little changed. The currency’s brief slide on Wednesday to a 34-year low near 152 per dollar triggered an emergency meeting of Japan’s three main monetary authorities to prevent further declines. In China, authorities are trying to mitigate the fallout of the yen’s weakness on the yuan, which hit a four-month low last week. The yuan was little changed at 7.2274 on Thursday.
“Asian currencies continue to take cues from moves in RMB, JPY and USD. To some extent, there is still lingering uncertainty on RMB and growing bias that there may be more weakening in JPY, given expectations for a slow and steady pace of BOJ policy normalisation (intervention risks aside),” said Christopher Wong, FX strategist at OCBC..
“Taken together, alongside the Fed in no hurry to cut, Asia FX may stay under pressure in the interim.”
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