Asian currencies extended losses on Thursday, pressured by the greenback surging to a one-year high on momentum triggered by Donald Trump's election victory while emerging market stocks traded lower on an uncertain economic outlook.
Ringgit, Thai baht, and the Indonesian rupiah were all trading at their weakest levels in at least three months, with ringgit clocking its fourth consecutive session of losses.
The Philippine stock index fell 2.3%, slipping for the seventh straight session, while shares in Jakarta shed more than 1%. Benchmark indexes in Malaysia and Thailand also edged lower.
Assets in Asia have suffered significantly in the aftermath of Trump's win in the U.S. presidential election last week as his policies are seen fanning inflation which could mean a shallower U.S. rate cut cycle.
The risks of possible tariff hikes for Chinese and Asian exports to the United States have emerged as another major concern for currency markets.
"In general, we think tariffs should hurt trade, which is a headwind for regional currencies," Saktiandi Supaat, chief FX strategist at Maybank, said.
On equities, Supaat said, "general appetite for risk seems to be more measured and as such regional equity markets are mixed and not quite tracking the rally in U.S. equities".
Outflows have picked up pace in Malaysia and Thailand as their trade-dependent economies are vulnerable to tariff risks. Their currencies have lost around 4% since the U.S. election outcome.
"Indonesia and India are more domestic demand driven, and are thus perceived by investors to be relatively more resilient to tariff threats compared to Asian peers," DBS analysts said.
An Indonesian central bank official said they will monitor and take measures to stabilise rupiah including through intervention, clarifying that the currency was still performing better than its regional peers.
Meanwhile, the Indonesian finance minister defended plans to raise value added tax in January amid criticism it will hurt consumers, in order to maintain the health of the state budget.
"In the near term, markets are likely to be edgy as they continue to await further Trump policy announcements and cabinet announcements," Maybank analysts said, adding they see support for rupiah at 15,882 per dollar.
Investors have hiked their short bets on Asian currencies, according to a Reuters poll.
HIGHLIGHTS:
** Taiwan central bank chief doubts Trump administration will penalise Taiwan
** Thai consumer confidence rises for first time in 8 months in October
** Vietnam raises $244 mln from govt bond auction - Reuters
