BENGALURU: Asian currencies gained ground against a weaker dollar on Thursday, and equities climbed with those in Taiwan touching a record high, as data suggested the US economy was cooling, fuelling hopes for a September rate cut by the Federal Reserve.
Taipei stocks rose as much as 1.6% to touch a record high, boosted by chip stocks following a strong overnight performance on Wall Street. Equities in Singapore inched up 0.6% to remain at their highest level since April 2022.
Manila shares rose 0.9% to their highest level in a month, while stocks in Jakarta gained 0.7% to record their highest level since May-end.
Regional currencies also edged higher, with the South Korean won, the Taiwanese dollar and the Malaysian ringgit appreciating between 0.2% and 0.3%.
The dollar index was on the back foot on Thursday after the release of softer-than-expected economic data on Wednesday, including a weak services report and ADP employment figures, indicated a slowdown in the US economy.
Meanwhile, minutes of the Fed’s June 11-12 meeting showed that officials noted a slowing US economy and reduced price pressures, advocating caution before deciding on interest rate cuts.
As a result, investors are betting the Fed’s easing cycle could commence in September. Markets are now pricing in about a 67% chance of the Fed cutting interest rates at its September meeting compared to about 60% a week ago, according to the CME FedWatch Tool.
