Asian FX, stocks firm as investors await US inflation data

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  • Thai currency and stocks firm ahead of c.bank meeting
  • Malaysia’s fourth quarter GDP expected on Feb 11
  • BI rate decision on Thursday, seen to leave rates pending

Feb. 9 (Reuters) – The Thai baht managed to rise along with several Asian currencies on Wednesday, despite expectations that its central bank will leave its key rate unchanged just as the U.S. Federal Reserve is expected to start raising interest rates.

Investors should scour US inflation data later this week for clues about the pace of Fed policy tightening.

Analysts polled by Reuters had expected Bank of Thailand policymakers to meet on Wednesday to keep the overnight repurchase rate (THCBIR=ECI) at an all-time low of 0.50% to support the recovery in the economy. economy after a disruption caused by the virus. Read more

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Pipat Luengnaruemitchai, an analyst at Kiatnakin Phatra Securities, said in a note that Thailand’s central bank may find continued accommodative monetary policy too “binding” as inflationary pressures rise.

The baht rose for the second day in a row, gaining up to 0.2%, as did the South Korean won and the Indonesian rupiah.

“The dollar lost ground overall today, allowing Asian currencies to trade more firmly overall,” said Mitul Kotecha, senior strategist at TD Securities.

“While higher US real yields will likely limit any USD weakness, we continue to believe that Asian currencies will remain relatively resilient against other G10 and emerging market currencies.”

The benchmark U.S. Treasury yield on the 10-year note hit 1.97%, its highest level since Nov. 7, 2019, as investors await inflation data on Thursday.

Meanwhile, South Korean equities (.KS11) rose around 1%, helped by a tech rally on Wall Street boosting risk appetite. Read more

Other Asian stocks also rose.

Malaysian stocks (.KLSE) rose 1.1%, leading gains among Asian stocks, as a Reuters poll showed the country’s economy likely rebounded to growth in the final quarter of 2021, propelled by strong exports and private investment. Read more

Stocks in Thailand (.SETI) and Jakarta (.JKSE) rose 0.9% and 0.6% respectively.

India’s top-rated NSE Nifty 50 Index (.NSEI) also rose 0.8% as investors in the country eagerly awaited the Reserve Bank of India’s monetary policy decision scheduled for Thursday. Read more

Strong points:

**Indonesian benchmark 10-year yields are up 0.7 basis points to 6.503%

** Top gainers on Thai SETI (.SETI) include TWZ Corporation PCL (TWZ.BK) up 10%, Thai Capital Corporation PCL (TCC.BK) up 8.93%, Lalin Property PCL (LALIN .BK) up 5.56%

** Straits Times Index (.STI) up 0.14%

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Reporting by Savyata Mishra and Indranil Sarkar in Bengaluru; Editing by Simon Cameron-Moore

Our standards: The Thomson Reuters Trust Principles.

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