Asian currencies rallied to the highest in seven months as ebbing US recession concerns, bets on US Federal Reserve rate cuts next month and an improving domestic backdrop lifted sentiment in the region.
The Bloomberg Asia Dollar Index gained as much as 0.6 percent yesterday to the highest since January.
The South Korean won and the Malaysian ringgit led the regional advance on upbeat growth prospects and the Thai baht rose on easing political tensions.
Photo: Reuters
“It feels like a Goldilocks scenario, where US recession fears fade while growth momentum in the region remains moderate,” Oversea-Chinese Banking Corp foreign exchange strategist Christopher Wong (黃經隆) said in Singapore. “There is room for Asia ex-Japan currencies to recover against a backdrop of developed-market central banks largely on an easing bias.”
The ringgit rose as much as 1.5 percent to 4.3678 per US dollar, the strongest since February last year. On Friday, Malaysia reported a stronger-than-expected increase in second-quarter GDP from the previous year, while global funds poured the most cash into its stock market since June.
The baht extended gains to 34.409 per US dollar, the highest since January, after Paetongtarn Shinawatra on Friday won enough votes in parliament to become the next Thai prime minister.
Goldman Sachs Group Inc economists on the weekend lowered the probability of a US recession in the next year to 20 percent from 25 percent, citing last week’s better-than-expected US retail sales and jobless claims data. They also said they were “more confident” the Fed would cut interest rates by 25 basis points at its policy meeting next month.
Easing concern about a recession in the world’s biggest economy is a positive for Asia’s export-oriented nations. The won rallied 1.52 percent to 1,331.35, the highest since March. The Philippine peso rallied 1 percent to 56.66 per US dollar, its biggest gain since November last year, while the New Taiwan dollar rose 0.81 percent to 32.03 per US dollar, the highest since April.
The yen climbed as much as 1.7 percent versus the greenback to ¥145.19, before trimming the advance to about 1.1 percent as of 5:17pm in Tokyo as traders waited to see if Bank of Japan Governor Kazuo Ueda would provide hints on the central bank’s rate-hike path in his appearance in front of the parliament on Friday.
Regional equities also climbed yesterday, with the benchmark MSCI Asia Pacific Index rising almost 1 percent to head for its highest close in a month.
“The market is envisaging a brighter picture for Asian economies in the coming quarters,” Invesco Asset Management Japan global market strategist Tomo Kinoshita said. He expects investors to allocate more funds to Asian equities, especially to those in India, Indonesia and Malaysia.
SEEKING CLARITY: Washington should not adopt measures that create uncertainties for ‘existing semiconductor investments,’ TSMC said referring to its US$165 billion in the US Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) told the US that any future tariffs on Taiwanese semiconductors could reduce demand for chips and derail its pledge to increase its investment in Arizona. “New import restrictions could jeopardize current US leadership in the competitive technology industry and create uncertainties for many committed semiconductor capital projects in the US, including TSMC Arizona’s significant investment plan in Phoenix,” the chipmaker wrote in a letter to the US Department of Commerce. TSMC issued the warning in response to a solicitation for comments by the department on a possible tariff on semiconductor imports by US President Donald Trump’s
The government has launched a three-pronged strategy to attract local and international talent, aiming to position Taiwan as a new global hub following Nvidia Corp’s announcement that it has chosen Taipei as the site of its Taiwan headquarters. Nvidia cofounder and CEO Jensen Huang (黃仁勳) on Monday last week announced during his keynote speech at the Computex trade show in Taipei that the Nvidia Constellation, the company’s planned Taiwan headquarters, would be located in the Beitou-Shilin Technology Park (北投士林科技園區) in Taipei. Huang’s decision to establish a base in Taiwan is “primarily due to Taiwan’s talent pool and its strength in the semiconductor
An earnings report from semiconductor giant and artificial intelligence (AI) bellwether Nvidia Corp takes center stage for Wall Street this week, as stocks hit a speed bump of worries over US federal deficits driving up Treasury yields. US equities pulled back last week after a torrid rally, as investors turned their attention to tax and spending legislation poised to swell the US government’s US$36 trillion in debt. Long-dated US Treasury yields rose amid the fiscal worries, with the 30-year yield topping 5 percent and hitting its highest level since late 2023. Stocks were dealt another blow on Friday when US President Donald
UNCERTAINTY: Investors remain worried that trade negotiations with Washington could go poorly, given Trump’s inconsistency on tariffs in his second term, experts said The consumer confidence index this month fell for a ninth consecutive month to its lowest level in 13 months, as global trade uncertainties and tariff risks cloud Taiwan’s economic outlook, a survey released yesterday by National Central University found. The biggest decline came from the timing for stock investments, which plunged 11.82 points to 26.82, underscoring bleak investor confidence, it said. “Although the TAIEX reclaimed the 21,000-point mark after the US and China agreed to bury the hatchet for 90 days, investors remain worried that the situation would turn sour later,” said Dachrahn Wu (吳大任), director of the university’s Research Center for