Asian FX set for monthly falls as US rate, election risks loom
Sing dollar and ringgit to post worst monthly drops in 8 years
Indonesian rupiah set for worst monthly fall in 4-1/2 years
Thai baht set for worst month since February 2023
By Himanshi Akhand
Oct 31 (Reuters) -Asian currencies are set to post substantial monthly declines on Thursday, as tempered Federal Reserve rate cut expectations and some investor bets in the closely-contested U.S. presidential election gave the dollar a fillip.
The Singapore dollar SGD= has fallen about 2.8% in October in its biggest monthly drop since 2016, while the Indonesian rupiah's IDR= near 3.8% monthly drop is its worst since March 2020.
Both currencies were last largely flat.
The Malaysian ringgit MYR=, which was not trading on Thursday due to a public holiday, was the worst monthly performer in Asia with a 5.9% drop in October. The ringgit, however, still remains the best performer on a year-to-date basis.
The dollar took a breather on Thursday but was set to gain more than 6% this month, exerting downward pressure on regional currencies as investors pare back expectations of a large rate cut by the Fed next week. FRX/
Traders anticipate a 25-basis-point rate cut in the Fed's November and December meetings.
The greenback was also buoyed as some investors have been putting on trades betting Republican candidate Donald Trump will win the U.S. presidency, although opinion polls show he is still tied in a neck and neck race with Vice President Kamala Harris.
Barclays analysts said the pressure on Asian asset markets may increase on a Trump win, with the largest forex falls occurring in the South Korean won KRW=KFTC, the Thai baht THB=TH and the Chinese yuan CNY=CFXS.
The analysts, however, suggested that China stimulus could mitigate some of the impact from tariffs if Trump were to win.
"The impact of a larger stimulus package could also be significant from a portfolio channel perspective, as it could drive stronger investment inflows into China."
"Most EM currencies would benefit from an improvement in the China impulse factor. In Asia, the winners are THB, KRW and SGD, which tallies with trade/tourism linkages," they said.
The Thai baht was last flat at 33.750 per dollar, but was set for a near 4% monthly drop, its biggest since February 2023.
Regional stock markets were largely mixed on Thursday. Shares in Seoul .KS11 fell 0.7%, weighed by losses in the semiconductor sector after Samsung Electronics reported weak earnings, and those in Manila .PSI dropped 1%.
Bangkok equities .SETI rose 0.8%.
Thailand's finance ministry said Southeast Asia's second-largest economy is expected to grow 3% in 2025, supported by private consumption, exports, investment and tourism.
Investors are now monitoring U.S. nonfarm payrolls data due on Friday, ahead of the presidential election on Tuesday.
HIGHLIGHTS:
** BOJ keeps rates steady, puts focus on global risks
** Taiwan shuts down for arrival of strong Typhoon Kong-rey
Asian stocks and currencies as at 0353 GMT | ||||||
COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
Japan | JPY= | +0.24 | -7.83 | .N225 | -0.47 | 16.82 |
China | CNY=CFXS | -0.08 | -0.32 | .SSEC | 0.36 | 10.19 |
India | INR=IN | +0.01 | -1.03 | .NSEI | 0.04 | 12.05 |
Indonesia | IDR= | -0.06 | -1.94 | .JKSE | 0.35 | 4.45 |
Malaysia | MYR= | - | +4.91 | .KLSE | - | 10.12 |
Philippines | PHP= | +0.13 | -4.77 | .PSI | -0.97 | 11.78 |
S.Korea | KRW=KFTC | +0.02 | -6.63 | .KS11 | -0.68 | -2.98 |
Singapore | SGD= | -0.01 | -0.23 | .STI | - | 9.83 |
Taiwan | TWD=TP | - | -4.05 | .TWII | - | 27.27 |
Thailand | THB=TH | +0.04 | +1.24 | .SETI | 0.83 | 3.06 |
Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
Asian stock markets https://tmsnrt.rs/2zpUAr4
Reporting by Himanshi Akhand in Bengaluru; Editing by Jacqueline Wong
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