Most Asian currencies weakened on Tuesday a day after grim data from the world’s two biggest economies reignited worries about a global recession, while the Thai bhat advanced after the nation’s central bank forecast a rebound in second half growth.

The Indonesian rupiah, Malaysian ringgit, Philippines peso and the Taiwan dollar weakened between 0.1% and 0.2% against the US dollar, which hovered near a one-week high on safe-haven demand.

“Asian markets may range trade today as investors continue to digest the recent soft economic data coming out from both China and the US, and their implications for policy stimulus,” analysts at OCBC Bank wrote.

Monday’s underwhelming Chinese activity data spanned industrial output, retail sales and real estate, which was followed by frail US single-family homebuilders’ confidence and weakness in a New York state factory activity survey.

Resuming trade after a public holiday, the South Korean won led the fall in the region with a 0.6% decline and was on track for its worst day in over a week.

But a boost to chipmaker shares buoyed the country’s benchmark stock index to its highest level in nearly two months.

The peso slipped for the third straight session, weakening 0.1%, as the country’s central bank was set to deliver a half-point point rate rise on Thursday, a Reuters poll showed.

The Bangko Sentral ng Pilipinas (BSP) was also widely expected to hike rates by a quarter-point in September to catch up with its peers in containing soaring inflation.

That would add to the hefty unscheduled 75 basis point rise in July, its most aggressive since the central bank shifted to an inflation-targetting approach in 2002.

Asian currency bears retreat as inflation view improves

The rupiah fell for the second straight session after the country’s statistic bureau on Monday warned that its windfall export earnings, which heavily benefited from high commodity prices, may start dwindling despite larger-than-expected surplus in July.

The local currency has firmed 0.5% in August so far on the back of a nascent economic recovery.

It had lost over 4% in the first seven months of the year.

Indonesia is also one of the few laggards in the region that is yet to begin monetary tightening and is set to meet next week against the backdrop of strong second-quarter growth and soaring inflation.

Bucking the broader trend, the Thai baht rose 0.4% after the country’s central bank said that the domestic economy was expected to continue growing in the second half of the year as tourism picks up, despite a weaker-than-expected second quarter.

“We expect the economy to strengthen further in 2H, driven by a wider reopening from July,” Chua Han Teng, economist at DBS said.

“Private consumption and tourism, already rising, are set to gather additional momentum.”

Highlights

• Indonesian 10-year benchmark yields are up 3.2 basis points at 7.081%

• Leading gains in KOSPI are Samsung Electronics up 1.50% and SK Hynix up 4.39% Reuters