Asian markets navigate uncertainty amid currency and equity moves

Asian currency markets: In the Asian financial landscape, currencies faced a subdued Monday, with the Indonesian rupiah amplifying its losses amidst concerns surrounding the potential resignation of the country's Finance Minister. The rupiah, marked as one of the weakest performers in 2024 with a nearly 3 per cent decline, slipped an additional 0.2 per cent by 0320 GMT, extending its weekly losses to over 1 per cent against the US dollar.

The recent dip in confidence surrounding the rupiah stems from local media reports suggesting Finance Minister Mulyani Indrawati might step down ahead of the February 14 presidential election, sparking uncertainties about Indonesia's fiscal future.

Meanwhile, the Singapore dollar maintained a stable stance following the Monetary Authority of Singapore's decision to keep its policy unchanged for the third time, aligning with market expectations. The quarterly meeting schedule adopted in 2024 replaced the previous semi-annual schedule. Analysts at Maybank cautioned against ruling out the possibility of another policy tightening, contingent on factors such as geopolitical shocks, global growth surprises, or domestic price pressures.

Foreign exchange policy easing

Barclay's analysts echoed this sentiment, indicating that the likelihood of foreign exchange policy easing in Singapore this year is lower than market participants anticipate.

Throughout the week, the regional economic calendar will be marked by PMI releases from various countries, alongside fourth-quarter growth figures from Taiwan, Hong Kong, and the Philippines, as well as the latest inflation data from Indonesia and South Korea.

Liquidating property

Despite China's recent efforts to bolster its markets, the news of a court order to liquidate property giant China Evergrande Group looms, potentially deepening the crisis in the sector and affecting investor confidence in Southeast Asia's primary trading partner.

The regional currency landscape saw mixed movements, with Thailand's baht and the Taiwanese dollar edging up by 0.2 per cent, while the Philippine peso experienced a 0.3 per cent dip, and the Malaysian ringgit remained flat with a 0.1 per cent decrease.

On the equities front, markets were predominantly on an upward trajectory, extending a relief rally from the previous week. South Korean shares led the gains with a 1.43 per cent increase, closely followed by India with nearly a 1 per cent uptick. Indonesia and Malaysia witnessed a 0.5 per cent rise each, contributing to MSCI's broadest index of Asia-Pacific shares outside Japan reaching a near two-week high with a 0.7 per cent increase.

(with Reuters inputs)