Asian Currency

Emerging Markets – Philippine stocks up 1.1%; Most Asian equities jump, currencies weaken ahead of cenbank meetings

MANILA (Reuters): Most Asian stocks rose on Monday while currencies weakened against the greenback, led by Indonesia’s rupiah, as investor attention turns toward central bank meetings due this week that could stimulate volatility in currency markets.

Stocks in Manila were up 1.1%, followed by equities in Taipei, which gained 1%. On the other hand, the rupiah depreciated 0.6% against the U.S. dollar. Malaysia’s ringgit followed suit with a 0.3% dip. The ringgit, which declined to a 26-year low last month, has slipped about 2.7% so far this year.

Central bank officials in the U.S., Japan, Taiwan, Indonesia, Turkey, Brazil and Mexico, among others, will hold policy meetings this week, and most are likely to keep interest rates on hold – except the Bank of Japan, which is widely expected to end its eight-year-old negative interest rate policy.

Markets are almost sure the U.S. Federal Reserve will stand pat at its meeting on March 20 with the CME FedWatch tool showing a 99.0% certainty. As at 0645 GMT, the tool showed nearly 56% chance of a rate cut in June.

“However, markets are kept on their toes for any surprises around central banks’ policy guidance or pushback against the scale of rate cuts, especially with commodity prices on the rise and the last leg of the inflation fight proving to be sticky,” IG market analyst Yeap Jun Rong said.

Back in Asia, the yuan was flat while Shanghai stocks jumped 0.8% after data showed China’s factory output and retail sales beat market expectations over January-February.

“The lop-sidedness of the Chinese economy means that investment continues to be skewed towards manufacturing rather than real estate,” said Natixis senior economist Trinh Nguyen.

Thailand’s baht slipped 0.2%, whereas Bangkok stocks were up 0.3%. The South Korean won slipped 0.2% while the Philippine peso was flat.

Elsewhere, Russia’s rouble appreciated 0.3% a day after President Vladimir Putin won a record post-Soviet landslide in Russia’s election on Sunday, cementing his already tight grip on power. – Reuters

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