KUALA LUMPUR, NOV 10 — The ringgit led losses among emerging Asian currencies and stock markets retreated on Friday, as the United States (US) Treasury yields surged after the Federal Reserve chair said officials were “not confident” interest rates were high enough to defeat inflation.
The ringgit fell 0.6 per cent against the dollar and was on track for its fourth straight session of losses. The benchmark index for the Kuala Lumpur stock market slipped 0.3 per cent.
“The strength in the US yields and hawkish comments from Fed chair Jerome Powell are contributing to the easing of major Asian currencies, including the ringgit,” said Christopher Wong, FX strategist at OCBC.
The ringgit decline erased the three per cent gain logged between November 1 and November 6, though the currency held a 0.15 per cent rise for the week.
Stocks in South Korea slumped one per cent, while those in Singapore, the Philippines, and Taiwan dropped as much as 0.7 per cent.
The South Korean won eased as well, weakening 0.5 per cent against the US dollar.
“The won was initially supported by weekend news that Korea reimposed a full ban on equity short selling, which drove a sharp Kospi rally on Monday (November 6),” said Chang Wei Liang, FX and credit strategist at DBS Group Research.
Following the strong rebound in the greenback, Chang predicts the US dollar – South Korean won pair to consolidate at around 1,320 – 1,340 for now. The won was trading at 1,316.0 per dollar as of 0310 GMT.
The Philippine central bank is set to meet on November 16 to decide on its cash rate. Analysts at Citi expect the Bangko Sentral ng Pilipinas (BSP) to hike interest rates by a quarter-point.
The Indonesian rupiah dropped 0.2 per cent against the greenback while stocks in Jakarta fell one per cent.
— Reuters
