Thai baht, South Korean extend losses as Omicron worries persist

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  • South Korean won to three-week low, Thai baht to two-week low
  • Singapore shares up to 1% after two days of losses
  • Malaysian glove makers decline

December 21 (Reuters) – The Thai baht hit a two-week low on Tuesday as concerns over the Omicron coronavirus variant weighed on the outlook for the tourism-dependent economy, while the South Korean won and the Philippine peso also registered modest declines.

Trade has been choppy in markets around the world amid a global surge in Omicron cases, the possibility of more restrictions and low year-end liquidity. Major Wall Street indices and oil prices collapsed overnight.

In Asia, currencies were largely mixed on Tuesday, with the South Korean won remaining at its three-week low as the Philippine peso lost ground, while the Malaysian ringgit strengthened 0.3%.

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The Thai baht fell half a percent, continuing the decline of the previous session, as the tourism-dependent economy reported its first case of local transmission of the Omicron variant. Read more

“Depreciation pressures on (the) Thai baht continue as disruptions to domestic and regional tourism from the spread of Omicron weighed on the outlook for economic recovery,” Mizuho Bank analysts said in a note. .

The Bank of Thailand (BoT) is expected to keep interest rates at record highs on Wednesday and until next year, economists in the Reuters poll say, to support an economy still struggling with the fallout from the pandemic.

Analysts at the Australian and New Zealand banking group (ANZ) expect the BoT to start considering policy normalization only in 2023.

The Thai baht is the region’s worst performing currency so far this year. It is on track to lose more than 11% in 2021 – its biggest annual decline since 2000 – under pressure from a strong US dollar and a drying up of foreign inflows.

Regional stocks were broadly mixed, with Singaporean stocks (.STI) advancing 1% after two days of sizable declines, while Philippine stocks (.PSI) fell 0.8%, marking their second consecutive day in the red .

Meanwhile, Malaysian glove makers such as Top Glove Corp (TPGC.KL), Hartalega Holdings (HTHB.KL) and Kossan Rubber Industries (KRIB.KL) fell 2-8%. U.S. Customs and Border Protection have banned Brightway Group imports due to alleged forced labor practices.

Malaysia’s government and businesses must respond to growing allegations of workplace abuse of migrant workers who fuel the country’s economy, or face risks to its export-based growth model, have warned the experts. Read more

STRONG POINTS:

** Indonesian 10-year benchmark yields are slightly below 6.433%

** India cuts import tax on refined palm oil to 12.5% ​​to calm prices –

** Main forecast for Thai exports in November, up 15-16% this year – read more

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Sameer Manekar report in Bangalore; Editing by Ana Nicolaci da Costa

Our Standards: Thomson Reuters Trust Principles.


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