Asian currencies: Malaysian ringgit fall, peso inches higher

BENGALURU: Stocks in Singapore and South Korea led declines among Asian equities on Wednesday, with investors cautious ahead of the hotly contested US election next week, while currencies also trended lower with the dollar at a three-month peak.

The broader MSCI index of international emerging markets equities retreated 0.7% and MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.8%.

Singapore equities declined 0.9% to hit their lowest level since mid-September. Seoul shares fell 0.9% too.

Saktiandi Supaat, head of Asia forex research at Maybank, said investors were weighing the potential outcome of the US election and the Federal Reserve’s policy trajectory next week, as well as the outlook for global growth, including an expected China fiscal stimulus package.

Chinese stocks dipped 0.6% as traders awaited a top leadership meeting in Beijing next week that could reveal details of the package.

Reuters reported on Tuesday that China is considering approving next week the issuance of more than 10 trillion yuan ($1.4 trillion) in extra debt in the next few years to revive its fragile economy.

Among currencies, the Malaysian ringgit fell 0.3% and was on track to log its worst month since November 2016.

The Philippine peso inched 0.1% higher and was headed for its worst monthly performance in two years.

The pressure on regional currencies this month reflects the strong performance of the dollar, which is headed for its best monthly performance in about two-and-a-half years as investors pare back their expectations of a large rate cut by the Fed.