SINGAPORE's dollar inched higher on Tuesday after a key consumer price gauge rose more than expected last month, while most other Asian currencies traded in a tight range as expectations that U.S. rates will remain elevated for longer boosted the dollar.
The Singapore dollar appreciated 0.2% after data showed core inflation, which excludes private road transport and accommodation costs, rose 5% year-on-year in April, while a Reuters poll of economists had forecast a 4.7% increase.
Lower inflation for electricity, gas, food, retail and other goods was offset by higher inflation for travel-related services, the Monetary Authority of Singapore (MAS) and the trade ministry said in a joint statement.
"We continue to expect MAS to keep its monetary policy parameters unchanged this year as growth slows and inflation pressures ease," analysts at Goldman Sachs said in a note.
Elsewhere in Asia, the Thai baht weakened the most among its peers, falling 0.6% to hit its lowest since March 15, and on track for a sixth straight session of decline.
"The major force behind the weakness has been political uncertainty i.e. whether the coalition government led by the Move Forward Party will gain enough support from the Senate," said Poon Panichpibool, a markets strategist at Krung Thai Bank.
After the May 14 elections, Thailand's two winning parties are now working to overcome the built-in advantage for a military-backed bloc and form a government.
"In the near term, I expect domestic political factor to remain a headwind for the Thai baht," Panichpibool said.
Meanwhile, the Indonesian rupiah and the Philippine peso were little changed. South Korea's won appreciated 0.5% and its stocks rose, buoyed by hopes of a U.S. debt ceiling deal.
U.S. President Joe Biden and House Speaker Kevin McCarthy could not reach an agreement Monday on how to raise the U.S. government's $31.4 trillion debt ceiling, but vowed to keep the talks alive.
Further weighing on emerging assets, some Federal Reserve officials hinted on Monday that the U.S. central bank still has more to go in tightening monetary policy, helping the dollar hit a six-month high against the yen.
Additionally, the Chinese yuan dipped 0.2%, while stocks in Shanghai dropped close to 1%.
Stocks in Asia were largely upbeat, with Indonesian and Singapore equities gaining 0.4% and 0.3%, respectively, while Thailand shares dipped 0.2%.
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** Taiwan c.bank says cautious approach helped it avoid need for quantitative easing
** EXCLUSIVE-Malaysian tycoon weighs selling a stake in $2.7 bln port business -sources
** Indonesia, Iran sign preferential trade agreement - Reuters
