Financial basis

South Korean won surges as investors hope for BoK rate hike

  • Won the best eye trading session in almost 3 weeks
  • Rupee up 0.1% after coal export ban lifted
  • Philippines’ November trade deficit widens to $ 4.7 billion, peso falls

Jan. 11 (Reuters) – The South Korean won dominated the gains of emerging Asian currencies on Tuesday, firming 0.5% as upbeat economic data fueled speculation its central bank would raise interest rates, while telecommunications stocks led the gains in Singapore stocks.

The Thai baht, Singapore dollar and Malaysian ringgit strengthened 0.1% to 0.3% as the greenback stagnated pending the appointment hearing of incumbent Federal Reserve Chairman Jerome Powell. later today for further clues on policy standardization.

The won strengthened to 1,193.40 per dollar in its best trading session in nearly three weeks, as robust partial trade data for January adds to the case for policy tightening monetary policy by the Bank of Korea (BoK) at its meeting on Friday.

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Maybank analysts said the won was benefiting from falling COVID-19 infections, growing concern over geopolitical tensions following a North Korean hypersonic missile test, as well as a warning from the Minister of Finance that currency movements were being watched.

“The focus is on the BoK’s monetary policy meeting as we seek a 25 basis point hike,” Maybank analysts said in a note, noting that this stubbornly high inflation should prompt the central bank to continue its tightening cycle, having already raised rates twice.

The country’s finance ministry warned Monday night that movements in the forex market would be closely watched after the won traded to its lowest in a year and a half. Analysts expect the USD / KRW exchange rate to be capped at 1,200.

The Philippine peso fell 0.1%, missing a broader recovery as the country’s imports continued to outpace exports in November, bringing its trade deficit to $ 4.71 billion.

“With global crude oil prices remaining high at the start of this year, the Philippines could continue to experience large short-term trade deficits… and the pressure on the peso to weaken is expected to persist into 2022,” said Nicholas Mapa , senior economist. for the Philippines at ING.

The rupee extended its gains after Indonesian authorities relaxed the ban on shipments of thermal coal, one of the Southeast Asian country’s main exports, on Monday. Read more

Meanwhile, Asian stocks were lukewarm on mixed signals from Wall Street overnight.

Singapore (.STI) stocks led the gains with a gain of 0.4% after Singapore Telecommunication (Singtel) (STEL.SI) jumped 4% on media reports claiming it was considering divesting its shares. Australian fiber assets worth billions of dollars.

Singtel, however, said in a statement that there was no assurance that a deal would be reached.

STRONG POINTS

** Shares of major Indonesian coal miners rose on Tuesday but failed to raise the Jakarta benchmark (.JSKE), down 0.2%

** The main winners of the FTSE Bursa Malaysia Kl (.KLSE) index include RHB Bank Bhd (RHBC.KL) up 5.5% and Hong Leong Financial Group Bhd (HLCB.KL) up 4.2 %

** Indonesian 10-year benchmark yields up 0.2 basis points to 6.465%

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Reporting by Anushka Trivedi in Bangalore; edited by Simon Cameron-Moore

Our Standards: Thomson Reuters Trust Principles.