Asian currencies: Philippine peso, South Korean won slip amid Fed uncertainty

BENGALURU: Asian currencies were subdued on Wednesday and regional equities were mixed, as investors warily awaited US President Donald Trump’s Federal Reserve nominations while eyeing mounting evidence that tariffs are crimping US economic growth.

The Philippine peso and South Korean won fell more than 0.2%, while Taiwan’s dollar, Thai baht and Indonesian rupiah traded flat.

The dollar index was range-bound against a basket of currencies as traders continued to price in a more than 90% chance of a Fed rate cut in September.

In regional equity markets, Taipei and Seoul slipped 0.8% and 0.3%, respectively. Manila stocks added over 0.6%, extending gains after Philippine inflation hit its lowest in nearly six years, potentially opening room for rate cuts.

Bangkok shares advanced over 1% for a third straight session, marking their highest level since February 20.

Trump said on Tuesday that he will decide on a Fed board nominee by the end of this week while narrowing replacements for Fed Chair Jerome Powell to four candidates.

The announcement coincided with US services activity flat-lining in July as input costs surged, highlighting the adverse impact of Trump’s aggressive tariffs on businesses. While tariffs dominated first-half market sentiment, they paradoxically boosted Asian growth through export front-running, with positive second-quarter GDP surprises from Indonesia, Taiwan, Singapore and Vietnam, while China exceeded targets at 5.3% year-over-year, said Lin Li, Asia Head of Global Markets Research at MUFG.