BENGALURU (April 13): Risk-sensitive emerging Asian currencies opened the week softer on Monday after the US and Iran failed to reach a peace deal and the US Navy moved to block Iranian traffic through the Strait of Hormuz, pressuring markets exposed to oil price shocks.
In Hungary, the forint shot up against the US dollar and the euro as investors bet on a boost for the economy following a resounding election defeat for nationalist Viktor Orban after 16 years in power.
The forint rose around 2% to 367.67 per euro in thin Asia trade, touching an almost three-year peak, and gained about 1.7% to 314.04 per dollar, the highest in more than four years.
Goldman Sachs analysts said that the election outcome is expected to boost Hungarian assets as European Union fund inflows will be released at a quicker pace, supporting the economy.
In Asia, the Indonesian rupiah slipped to a new lifetime low of 17,135 per dollar, while the Philippine peso once again breached the key 60-per-dollar mark, and the Thai baht weakened to 32.410 per dollar.
Marathon talks in Islamabad ended in stalemate and US President Donald Trump on Sunday said the US Navy would start blockading the Strait of Hormuz, sending oil prices back above US$100 a barrel.
“The corollary is that a meaningful resumption of flow of traffic through the Strait of Hormuz looks much less likely now,” MUFG analyst Michael Wan wrote in a note.
“Asian currencies, especially energy importers such as the Indian rupee, the Philippine peso, and the Thai baht, are likely to be on the back foot for now.”
Singapore’s dollar slipped to 1.2759 per greenback and the city state’s benchmark equity index inched lower a day ahead of the central bank’s monetary policy decision.
The Monetary Authority of Singapore (MAS) is expected to tighten policy on Tuesday as the Middle East war drives up energy prices, stoking inflation and darkening the growth outlook at home and abroad.
Equities around the region were mainly in the red: the Philippine stock index fell as much as 2%, while Malaysia’s benchmark gauge slipped 0.9%.
The artificial intelligence darling of east Asia, South Korea’s Kospi index, tumbled as much as 2.2%, while Taiwan’s tech-heavy gauge traded largely flat.
Thailand’s stock market was closed for a holiday.
