Asian currencies mixed amid global financial concerns

ASIAN currencies began the week on a mixed note on Monday after a rescue plan for Credit Suisse materialised over the weekend, while simmering concerns over the health of the global financial system dampened sentiment.

The Malaysian ringgit and Philippine peso appreciated 0.1% each, while the Indonesian rupiah and Singapore dollar weakened 0.2% and 0.1%, respectively.

Regulators globally moved to reassure markets by pledging to enhance liquidity, and Swiss authorities pushed UBS Group AG on Sunday to buy rival Credit Suisse Group AG.

The Monetary Authority of Singapore (MAS) said Credit Suisse continued to operate without limitations in the city-state.

The MAS added that it was in “close touch” with Swiss authorities over the proposed takeover.

Traders have priced in about a 60% chance that the U.S. Federal Reserve will raise interest rates by 25 basis points (bps) at a policy meeting this week.

Market pricing implies that the Fed will start a steady series of cuts as soon as June. The “Fed needs to strike a delicate balance between preserving financial stability, combating inflation and maintaining credibility.

30 day Fed fund futures are pricing ‘an end in sight’ for Fed tightening cycle with rates peaking around 4.9% and rate cut coming in as early as June,” said analysts at OCBC Bank in a note.

Philippine Finance Secretary Benjamin Diokno expressed optimism that domestic inflation would ease to around 4% towards the end of the third quarter.

Diokno added that the central bank could decide either to lift the key interest rate by 25 bps or keep policy settings unchanged at its next meeting on Thursday.

A Reuters poll estimated that Taiwan’s central bank would keep its policy rate unchanged this week after signalling in December an end to its tightening cycle over expectations of a slowing economy.

Among equities in the region, the Singapore benchmark lost more than 1%, the most in a week, while stocks in Manila and Jakarta fell 0.6% and 0.8%, mirroring U.S. sentiment.


** Hong Kong Monetary Authority says Credit Suisse business in city open as usual

** Thailand’s gradual policy tightening still appropriate – c.bank

** China keeps lending benchmarks unchanged in March, as expected – Reuters