* Singapore stocks jump 1%
* Singapore GDP beats expectations
* Indonesian stocks hit a three-week high
By Adwitiya Srivastava and Echha Jain
Aug 13 (Reuters) - Singapore shares rallied on Tuesday and the local
dollar gained after the trade ministry slightly raised its expectations for the
island country's economic growth reflecting favourable external demand.
Singapore's Ministry of Trade and Industry updated its growth forecasts for
the year to between 2% and 3%, the upper end of its previous forecast range of
1%-3%.
Singapore stocks added 1% while the local currency, the Singapore
dollar strengthened 0.1% against a steady greenback.
"In the medium-term, we remain positive on the Singapore dollar given robust
macro fundamentals and a monetary policy that has an appreciating currency as a
default stance," analysts at Maybank said.
Singapore on Tuesday also posted gross domestic product growth of 2.9% in
the April-June quarter from a year earlier, above market expectations.
Indonesian stocks and its currency, the rupiah, strengthened on Tuesday even
as the country's finance minister Sri Mulyani warned that the economy faces
global political and economic headwinds.
The Indonesian rupiah gained 0.4% against a steady greenback, while
stocks in Jakarta added 0.7%, a near three-week high.
The rupiah has been among the worst performing emerging Asian currencies
over the past year around worries of a wider fiscal deficit, but favourable
domestic conditions, including a new elected government, have buoyed the
currency.
The currency has rallied around 2.6% this quarter.
Analysts currently expected Bank Indonesia (BI) to cut interest rates in the
next policy meeting.
There have been "better fund inflows lately into Indonesian bonds on
expectations of BI rate cuts, and this appears to be extending into today's
session," said Alvin Tan, head of FX Strategy at RBC Capital Markets.
Markets will now pivot their focus towards Wednesday's U.S. consumer price
index print for a view on whether the Federal Reserve may look to lower
benchmark interest rates at its upcoming monetary policy meeting in September.
Any Fed move is expected to give cues to central banks in Asian economies
weighing next steps for local interest rates.
"Domestic conditions will determine whether central banks will cut, hike or
stay on hold," said analysts at Morgan Stanley, adding that Asian central banks
will be considering the trio of U.S. growth, Fed policy path and the U.S.
dollar.
HIGHLIGHTS:
** India's July retail inflation eases to five-year-low of 3.54% y/y
** Japan's Nikkei climbs 2% on return from holiday as yen stabilises
** Philippine central bank set to hold rates on Aug. 15 but decision close
#NAME?
COUNTRY FX RIC FX FX INDE STOCKS STOCK
DAILY YTD % X DAILY S YTD
% % %
Japan -0.20 -4.36 <.N2 2.59 7.95
25>
China EC>
India +0.02 -0.89 <.NS 0.00 12.04
EI>
Indones +0.38 -3.12 <.JK 0.73 1.07
ia SE>
Malaysi +0.04 +3.19 <.KL 0.03 10.49
a SE>
Philipp +0.23 -3.12 <.PS 0.50 3.05
ines I>
S.Korea 11>
Singapo +0.08 -0.29 <.ST 0.97 0.82
re I>
Taiwan +0.15 -5.17 <.TW -0.22 21.17
II>
Thailan +0.24 -2.80 <.SE -0.14 -8.52
d TI>
(Reporting by Adwitiya Srivastava and Echha Jain in Bengaluru; Editing by
Sonali Paul)
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