Most Asian currencies largely unchanged

BENGALURU: Equities in Taiwan and South Korea advanced on Wednesday as some of the world’s top chipmaking firms surged on bullish prospects for AI technology, while shares in Indonesia snapped a losing streak on resuming trade after a two-day holiday.

Taiwan’s benchmark index rose as much as 2.3% and hit a record high for the seventh straight session, boosted by chipmakers like Taiwan Semiconductor Manufacturing co, after its major client Nvidia soared to a new peak.

In South Korea, shares gained 1.3% to touch an over two-year high, with chipmakers Samsung Electronics and peer SK Hynix, another Nvidia supplier, gaining 1.4% and 2%, respectively.

Elsewhere in the region, shares in Indonesia gained up to 0.8% on resuming trade after two days of holiday. The currency, one of the worst performers so far this year, appreciated 0.2% to recover off its four-year lows.

Bank Indonesia (BI) is expected to keep its interest rates unchanged at its monetary policy meeting on Thursday, according to a Reuters poll, with economists pushing their first rate cut expectation to the first quarter of next year.

However, with the rupiah depreciating and uncertainty regarding the country’s ongoing political transition and fiscal outlook, some analysts are not ruling out a rate hike by the central bank.

“The rate hike is necessary to deliver BI’s (Bank Indonesia) promise on using monetary policy to contain volatility on IDR (Indonesian rupiah),” said Fakhrul Fulvian, economist at Trimegah Securities.

Analysts at MUFG said in a client note “while we expect the depreciating trend in the Indonesian rupiah will persist, the recent sharp pace of decline has surprised us”, adding that a rate hike can be expected if the rupiah weakens further.

Among other currencies, the Thai baht slipped 0.2%, while the Singapore dollar, the Philippine peso, the Malaysian ringgit, and the Taiwan dollar were largely unchanged.

Globally, softer-than-expected retail sales data in the United States reignited hopes of an imminent rate cut by the Federal Reserve, pushing the dollar lower. It recovered slightly early on Wednesday.

“Rate path forward and the timing of the first cut remain uncertain and officials seem more comfortable to wait a while more before making the first move,” analysts at Maybank wrote in a client note.