Emerging markets: Philippine peso and Thai baht weaken as most Asian currencies stabilize

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MANILA, Sept. 27 (Reuters): The Thai baht and the Philippine peso eased on Monday as other emerging Asian currencies made meager gains against a broadly stable US dollar.

The Thai baht weakened 0.5% on Monday, catching up with peers who eased as Thai markets were closed for a holiday on Friday.

The region’s worst performing currency this year has lost more than 10% against the dollar.

Investors also digested weaker-than-expected export data from Southeast Asia’s second-largest economy and turned to the Bank of Thailand’s policy meeting on Wednesday.

Poon Panichpibool, strategist at Krung Thai Bank, said selling pressure would remain on the baht due to the prolonged impact of recent Covid-19 outbreaks in Thailand.

“It will take some time to build consumer confidence with heavy household debt and uncertainty about future epidemics or closures. In addition, the delayed reopening of major cities for tourism is also expected to limit short-term economic recovery. “

The tourism-dependent nation last week postponed plans to allow entry of visitors vaccinated without quarantine, raised the public debt ceiling and pledged to step up vaccinations and stimulus measures.

The Philippine peso, which has depreciated more than 2.5% so far this month amid a growing trade deficit, lost another half a percent and hit a new two-month low.

“The widening of the trade deficit and the general decrease in the flow of financial accounts are two factors that are likely to weigh (on the peso),” said Nicholas Mapa, senior economist at Ducth ING bank. Data earlier this month showed the Philippines’ trade deficit remained above $ 3 billion for a fourth consecutive month in July.

Markets were also cautious pending updates on China’s Evergrande debt crisis, although the slight increase in risk sentiment helped Singapore stocks reach a nearly three-week high.

Chinese stocks, however, fell 1%, weighing on other regional stocks such as Indonesia and Malaysia. – Reuters


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