EMERGING MARKETS – Philippine peso hits record high as Asian currencies hit by risk aversion


By Harish Sridharan

September 5 (Reuters)The Philippine peso hit a record low and other Asian currencies fell against the greenback on Monday, as Russia’s indefinite shutdown of its main gas pipeline to Europe and the extension of COVID restrictions in China strengthened the safe haven dollar.

Stocks across Asia also lost ground, while the euro fell to its lowest level in two decades. XRF/

“Haven’s request was arguably triggered by the global geopolitical risk dimensions to a more aggressive Russian stance in suspending gas supplies to Europe,” said Vishnu Varathan, head of economics and development. strategy at Mizuho Bank.

The peso PHP= fell 0.1%, while the Taiwanese dollar TWD=TP and Singapore dollar CAD= lost between 0.2% and 0.5%. vietnamese dong VND= fell 0.4% to a near two-and-a-half-year low after an extended holiday weekend.

Riskier emerging market assets have come under immense pressure recently, with markets anticipating a more hawkish response from central banks since the Jackson Hole symposium last month.

Among other Asian currencies, the South Korean won KRW=KFTC slipped 0.7% to its lowest level since April 2009.

In China, the COVID-19 outbreaks and bleak growth outlook further dampened risk sentiment.

The yuan CNY=CFXS has fallen more than 9% this year and was down 0.4% on Monday, hitting its lowest level since August 2020.

In Indonesia, subsidized fuel prices increased by around 30% over the weekend. Heavy energy subsidies had contained inflation in Indonesia, allowing the central bank to delay raising interest rates until last month, well behind its regional and global peers.

“For Bank Indonesia, the fuel price adjustment is a huge game-changer, as the tax shield against inflation is no more,” said Wellian Wiranto, an economist at OCBC Bank.

He expects the central bank to raise rates by at least another 50 basis points over the rest of the year.

The Rupee RDI= fell 0.1%, but Jakarta shares .JKSE increased by 0.6%.

Sharing benchmarks in Seoul .KS11 and Manila .PSI fell 0.4% and 0.6%, respectively, while those in Singapore .STI and Mumbai .NSEI moved higher.

Stocks in Thailand .SETI and the baht THB=TH were both weaker after the country announced that the consumer price index rose 7.86% in August from a year earlier, the fastest pace in 14 years, but in line with expectations .

The Bank of Thailand president said inflation is expected to peak in the third quarter and is expected to top 6% this year.

During the week, Asia-focused investors will be on the lookout for key inflation data out of China, the Philippines and Taiwan, as well as an interest rate decision from the Malaysian central bank.

STRONG POINTS

**Shenzhen China will adopt multi-level COVID measures; Chengdu extends lockdown

** Indonesia 10-year benchmark bond yield ID10YT=RR reached its highest level since August 22

** South Korea promises pre-emptive action to stabilize markets

Asian Stock Indices and Currencies at 0409 GMT

COUNTRY

FXRIC

DAILY FX %

FX YTD %

INDEX

DAILY STOCKS %

INVENTORY YTD %

Japan

JPY=

-0.10

-18.00

.N225

-0.10

-4.06

China

CNY=CFXS

-0.44

-8.33

.SSEC

0.10

-12.37

India

RNI=IN

-0.05

-6.90

.NSEI

0.35

1.42

Indonesia

RDI=

-0.15

-4.47

.JKSE

0.52

9.62

Malaysia

MYR=

-0.07

-7.16

.KLSE

-0.04

-4.91

Philippines

PHP=

-0.11

-10:45 a.m.

.PSI

-0.50

-6.50

South Korea

KRW=KFTC

-0.58

-13.26

.KS11

-0.29

-19.32

Singapore

CAD=

-0.23

-3.95

.STI

0.25

2.88

Taiwan

TWD=TP

-0.49

-9.92

.TWII

0.03

-19.44

Thailand

THB=TH

-0.11

-9.14

.SETI

-0.30

-2.43

Graphic: world exchange rates https://tmsnrt.rs/2RBWI5E

Asian scholarshipshttps://tmsnrt.rs/2zpUAr4

(Reporting by Harish Sridharan in Bengaluru; Editing by Edwina Gibbs)

(([email protected]; Twitter: https://twitter.com/damnit_saladin;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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