EMERGING MARKETS-Rupiah slips as inflation points to lower rates, China data powers peers

  • Reuters
  • Stock Market News
EMERGING MARKETS-Rupiah slips as inflation points to lower rates, China data powers peers
Credit: © Reuters.

(Repeats with no changes to text)

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh

* Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA

* Malaysian ringgit hits over six-month high

* Indian rupee tracks best day in two months

By Shashwat Awasthi

Sept 1 (Reuters) - Indonesia's rupiah weakened on Tuesday as the country's inflation rate in August cooled to its lowest in two decades, while other emerging Asian currencies benefited from robust Chinese factory activity data and weakness in the U.S. dollar.

The rupiah IDR= eased 0.2% after three sessions of gains, and Jakarta stocks .JKSE retreated to trade flat after inflation eased below the central bank's target range, as the country continues to battle a surge in coronavirus cases. inflation puts more pressure on Indonesia's central bank to reduce interest rates further, potentially reducing the return of one of foreign investors' favourite Asia currency carry trades and weakening the attraction of the rupiah.

There are, however, also concerns over the balance of policy in the country, with the central bank's hands tied by the rupiah's weakness this year. It is the biggest faller among Asia's emerging currencies this year, having lost roughly 5%.

The dip in the currency on Tuesday contrasted with bullish gains across Asia, as the Caixin/Markit survey of manufacturing purchasing managers showed activity in China expanding at the fastest clip in nearly a decade in August. Malaysian ringgit MYR= , often proxy for China's yuan, firmed 0.4% to its highest since Feb.19, while the Singapore dollar SGD= and the Thai baht THB=TH added 0.3% and 0.4%, respectively.

India, which suffered its worst economic contraction on record in the June quarter, saw a rebound with the rupee INR=IN set for its best day since July 2 and shares .NSEI recouping some of Monday's steep losses. dollar TWD=TP climbed 0.6% and was on course for its best day since March 20, as the country established a new bilateral economic dialogue with the United States amid increasing geo-political jostling with China. losses in the greenback also provided more support, with a number of leading "bears", or those betting on further losses, arguing its decline has only just begun following last week's shift in Federal Reserve policy to favour higher inflation and growth over price control. FRX/

Among stocks, South Korea .KS11 stood out with a near 1% rally after Asia's fourth-biggest economy unveiled plans to ramp up spending in the next few years to combat pandemic-induced economic weakness. Singapore's 10-year benchmark yield is down 3.7 basis points at 0.982%

** Top losers on the Singapore STI .STI include CapitaLand Commercial Trust CACT.SI down 2.38%, Capitaland Mall Trust CMLT.SI down 2.04% and SATS Ltd SATS.SI down 2%

** In the Philippines, top index gainers are Universal Robina URC.PS up 3.99%, SM Investments SM.PS up 2.65% and Bloomberry Resorts BLOOM.PS up 2.12%

Asia stock indexes and currencies at 0418 GMT

COUNTRY

FX RIC

FX DAILY % FX YTD %

INDEX STOCKS DAILY % STOCKS YTD %

Japan

JPY=

+0.24

+2.81

.N225

-0.11

-2.29

China

CNY=CFXS

+0.42

+2.10

.SSEC

0.04

11.38

India

INR=IN

+0.00

-3.03

.NSEI

1.01

-5.47 Indonesia

IDR=

-0.14

-4.80

.JKSE

0.06

-16.79 Malaysia

MYR=

+0.43

-1.35

.KLSE

0.11

-3.89 Philippines

PHP=

+0.09

+4.57

.PSI

0.30

-24.48

S.Korea

KRW=KFTC

+0.37

-2.28

.KS11

1.01

6.92 Singapore

SGD=

+0.27

-0.88

.STI

-0.51

-21.82

Taiwan

TWD=TP

+0.60

+2.57

.TWII

0.52

5.50 Thailand

THB=TH

+0.39

-3.36

.SETI

0.12

-16.94

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or

100

Related Articles