Emerging Asian currencies advanced on Wednesday as unease around the next round of economic stimulus in the United States shook the US dollar, while concerns about rising coronavirus cases and imminent cuts to corporate dividends dented Singapore stocks.
The Taiwanese dollar and South Korea’s won each rose for the fourth straight session, with Taiwan’s currency on track for its best day in almost three months while the Indonesian rupiah and Thai baht also posted modest gains.
Investors’ appetite for risk has improved this week on news of progress in developing vaccines for the novel coronavirus, reducing the US dollar’s safe-harbor appeal.
Republicans and Democrats are also struggling to come to terms over more fiscal support for the economy, contrasting with the historic deal done in Europe this week.
“The US fiscal negotiations would not be inspiring anyone to hold capital in the US and while most think we will see a resolution around Phase 4 stimulus, we find little progress being made at this juncture,” foreign exchange broker Pepperstone’s head of research Chris Weston said.
Stock markets across Southeast Asia were mixed, with Singapore the main standout, down almost 1 percent as property firms led losses, following a cut in dividend by real estate investment trust Mapletree Industrial Trust.
“There are fears that others will follow. The market expects more difficult dividend cuts across sectors,” said Jeffrey Halley, an analyst at trading platform OANDA.
The city state also reported almost 400 new coronavirus cases on Tuesday, its highest daily count in more than a month. — Reuters
