Most Asian currencies and equities struggled for direction on Tuesday as investors fretted over new worries about inflation, after a production cut by the Organization of Petroleum Exporting Countries, and a looming global recession.
The Malaysian ringgit and the Indonesian rupiah were the top gainers for the day, rising 0.3 percent and 0.4 percent, on account of elevated crude oil prices.
“The higher oil price puts the ringgit back in the frame as a regional currency to favor. This is probably helping the currency modestly for now,” said Paul Mackel, global head of FX research at HSBC.
Brent crude price continued its upward trajectory, stoked by the decision of the OPEC+ on Sunday, to cut output targets by a further 1.16 million barrels per day, stirring investor concerns about the inflationary environment.
“The surprise announcement of OPEC output cuts from May could pressure oil prices in the near term, which could imply more sticky inflation,” OCBC analysts said in a research note.
Other currencies like the Singapore dollar, Thai baht, Chinese yuan and the Philippine peso traded between flat and down 0.3 percent.
Globally, the safe-haven dollar recovered some losses, although it was still in a defensive mode, since weak manufacturing data from the US pointed to the possibility of the world’s largest economy slipping into recession. – Reuters
