*
Korean won leads currency rally, up 0.4% vs dollar
*
Shanghai stocks outpace region with 0.6% advance
*
Fed rate cut odds hit 84%, dollar weakens further
By Roushni Nair
Aug 28 (Reuters) - Most Asian stocks inched higher and
currencies regained some lost ground on Thursday, buoyed by a
weakening U.S. dollar, as mounting expectations for a Federal
Reserve rate cut next month prompted investors to rotate back
into riskier regional assets.
The South Korean won led the currency rally,
climbing 0.4% to 1,388 per U.S. dollar after the Bank of Korea
held rates steady in a widely anticipated decision. Seoul's
Kospi index mirrored the currency strength, advancing
0.5%.
Elsewhere, the Thai baht and Taiwan dollar
each firmed 0.2%, while the Indonesian rupiah, Philippine
peso, and Malaysian ringgit traded largely flat.
Equity markets showed broader momentum, with Jakarta's main
index and Kuala Lumpur's benchmark each posting
0.4% gains. Shanghai's composite index outpaced regional
peers with a 0.6% advance.
In the Philippines, the peso held steady while the
benchmark PSE index slipped 0.5% as investors positioned
ahead of an anticipated 25-basis-point rate cut by Bangko
Sentral ng Pilipinas later in the day.
BNP Paribas EM Asia FX strategist Parisha Saimbi sees "scope
for some Asian central banks to conduct further monetary easing,
particularly in Indonesia and the Philippines, where sluggish
economic growth could use further support."
Room for another rate cut in Malaysia could open up if U.S.
growth slows sharply and leads to further Fed rate cuts, Saimbi
added.
Traders amplified bets for a Fed rate cut next month after
New York Fed President John Williams signaled a reduction was
possible. The U.S. dollar index fell marginally, by 0.1%,
in its third straight session of losses.
This week, the dollar has faced additional pressure from
President Donald Trump's intensified campaign to influence
monetary policy, including his attempt to remove Fed Governor
Lisa Cook and install a loyalist.
Traders currently lay around 84% odds of a quarter-point
rate cut next month, and have priced in a cumulative 56 basis
points of easing by year-end.
The political pressure on Fed independence has particular
implications for Asian markets.
Saimbi said "currencies that would be more sensitive to
concerns of Fed independence would be those that hold larger
unhedged US asset exposure," specifically China, South Korea,
Taiwan, and Singapore in the Asian context.
Separately, Asia-Pacific shares outside Japan
fluctuated before closing 0.2% lower as concerns
over Nvidia's (NVDA) China outlook offset the AI giant's
strong earnings, pulling U.S. equity futures down in after-hours
trading.
HIGHLIGHTS:
** Philippine central bank sets new time for interest rate
announcements
** China trade negotiator: ready to manage differences with
Canada
Asia
stock
indexes
and
currenc
ies at
0344
GMT
COUNTRY FX RIC FX FX INDE STOCK STOCK
DAILY YTD X S S YTD
% % DAILY %
%
Japan +0.18 +6.8 China 0 EC>
India +0.14 -2.2 Indones +0.00 -1.6 Malaysi +0.14 +5.7 Philipp +0.05 +1.7 S.Korea 8 11>
Singapo +0.07 +6.2 Taiwan +0.17 +7.3 Thailan +0.12 +5.9 7
(Reporting by Roushni Nair in Bengaluru; Editing by Sonali
Paul)
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