The South Korean won and shares rebounded early on Tuesday after US Federal Reserve Governor Lael Brainard’s comments made it more likely that the Fed will stand pat in September.
The won stood at 1,109.5 as of 0203 GMT, up 0.4 per cent compared with Monday’s close of 1,113.5.
The Korea Composite Stock Price Index (Kospi) was up 0.6 per cent at 2,003.54 points.
“If the Fed ends up keeping its rates unchanged for September, the won will be kept at its current level which is at around 1,100,” said June Park, a foreign exchange analyst at Daishin Economic Research Institute.
The currency market has shifted to signal expectations the Monetary Authority of Singapore will refrain from easing next month, with a measure of the local dollar’s potential direction sliding to a four-year low.
Six-month forwards stumbled to minus 15.64 points on Thursday, the least since July 2012, data compiled by Bloomberg show. The rate touched 32.23 points on June 28, days after the UK vote to exit the European Union caused a global financial rout.
Futures contracts show the likelihood for the US Federal Reserve to raise interest rates at the Sept 20-21 meeting has gone down to 22 per cent after recent disappointing US economic data.
“The market is not looking at Singapore dollar depreciation at this point because of what’s happening in the US,” said Irene Cheung, a foreign-exchange strategist at Australia & New Zealand Banking Group Ltd in Singapore.
Asian stocks fell as investors weighed the outlook for monetary policy in the US and Japan after the European Central Bank downplayed the need for more economic stimulus. South Korean shares dropped amid concern North Korea may have conducted a nuclear test.
The MSCI Asia Pacific Index dropped 0.7 per cent to 141.03 as of 10:49am in Tokyo. The measure is heading for a 2.1 per cent advance this week as traders pared bets the Federal Reserve will raise rates at its September meeting while speculation swirled over whether the Bank of Japan will add to already record stimulus.
Shares in the US and Europe fell after ECB chief Mario Draghi played down the prospect of an increase in asset purchases at a time when concern over the impact of Brexit on the euro area is mounting.
“While the ECB disappointed, we could still expect additional stimulus later in the year as there’s so much uncertainty in Europe,” James Woods, a strategist at Rivkin Securities in Sydney, said by phone.
Hong Kong stocks opened flat Wednesday as investors took a breather after four days of gains while a surprisingly weak reading on the US services sector further doused expectations for an interest rate hike.
The Hang Seng Index edged up 10.07 points to 23,797.75.
The benchmark Shanghai Composite Index was also barely moved, ticking up 0.62 points to 3,091.33, while the Shenzhen Composite Index, which tracks stocks on China’s second exchange, inched down 0.01 points to 2,048.18.
THE following companies made material announcements before the opening of Wednesday’s market:
CapitaLand Mall Trust said that the new Funan mall, when ready in the fourth quarter of 2019, will be a platform that “inspires retail innovation” and offers a “new paradigm” for living, work and play.
Funan will go beyond selling IT products to “incorporating the tech experience throughout the entire integrated development”.
The new property will have a total gross floor area (GFA) of 887,000 sq ft. Occupying more than half the GFA at 500,000 sq ft will be the mall, a six-storey retail component which comprises four levels above ground and two basement levels. Three towers will sit above, including two six-storey premium Grade A office towers from Level 5 to Level 10 with a GFA of 266,000 sq ft, and a nine-storey block housing 279 co-living apartment units from Level 4 to Level 12 with a GFA of 121,000 sq ft.
Taiwan stocks rose on Tuesday tracking gains in some overseas markets and supported by foreign investors buying shares.
As of 0158 GMT, the main Taiex index rose 0.6 per cent to 9,144.96, after closing up 1.1 in the previous session.
The electronics subindex rose 0.9 per cent, while the financials subindex gained 0.2 per cent.
Tech component makers were among actively traded stocks. Optical storage device maker Ritek was up 2.1 per cent, while printed circuit board maker Compeq was 3.5 per cent higher.
Foreign investors have net purchased local shares so far in September, adding to their net buying for the past three months in a row.
The purchases have strengthened the Taiwan dollar to levels not seen since mid-August.
The Taiwan dollar firmed NT$0.092 to NT$31.414 per US dollar.
The South Korean won and shares rose to their strongest in over two weeks early on Monday as weaker than expected US jobs data reduced speculation on an imminent increase in US interest rates.
The won was quoted at 1,109.3 per US dollar as of 0208 GMT, up 0.7 per cent compared to the previous close of 1,117.2.
The Korea Composite Stock Price Index (Kospi) was up 0.8 per cent at 2,055.58 points.
The currency and the stocks were both at their strongest since Aug 19 of this year.