Asian FX subdued, dollar little changed

BENGALURU: Malaysian assets were little changed on Thursday after the central bank held interest rates steady as expected, while most other Asian equity markets edged higher on cementing bets of a US rate cut this month.

Bank Negara Malaysia left its overnight policy rate unchanged at 2.75 percent. The ringgit lost 0.12 percent and Kuala Lumpur shares edged down 0.1 percent.

“With stable expansion of domestic consumption confirmed in second-quarter GDP, the hold was widely expected,” said Ryota Abe, economist at Sumitomo Mitsui Banking Corp.

“Given Malaysia’s better economic performance among Asian peers, the ringgit should gradually appreciate.”

The ringgit has gained 5.6 percent year-to-date.

Meanwhile, Taiwan stocks led gains in the region and hit a one-week high, while South Korean shares advanced for a third straight session.

Chinese stocks bucked the trend, with the Shanghai Composite down for a third consecutive session on reports that regulators might ease short-selling restrictions.

US Federal Reserve Governor Christopher Waller reinforced his support for a rate cut this month, citing weakening labour market conditions.

The JOLTS report released on Wednesday showed that US job openings fell in July, bolstering expectations for monetary easing.

Political uncertainties in Southeast Asia’s two largest economies cast a shadow over regional markets, though Mitsui Banking’s Abe views these as country-specific rather than regional risks.

Indonesian authorities dismissed a police officer over the killing of a motorcycle taxi driver during anti-government protests that erupted over economic inequality and lawmakers’ housing allowances.