(Dec 3): Asian currencies fell on Tuesday, led by the Malaysian ringgit and the Indonesian rupiah, as the US dollar strength persisted following President-elect Donald Trump’s tariff threats, while regional stocks rallied on Wall Street’s tech performance.

The rupiah fell as much as 0.4% to 15,958 per dollar, nearing the psychologically important 16,000 threshold, which, if breached, could impact Bank Indonesia’s monetary policy and potentially delay interest rate cuts. Official statements suggest that the central bank intervened on Tuesday to curb the rupiah’s depreciation

The ringgit weakened 0.3% to its lowest level since Nov 22.

Trump’s tariff threat last week on China, Southeast Asia’s largest trading partner, had rattled investors, driving them away from riskier Asian assets and towards the safety of the dollar.

The dollar index, which tracks the greenback against six major currencies, edged up 0.2% to 106.53, reflecting a nearly 6% increase since early October, when Trump’s re-election prospects began influencing markets.

Meanwhile, Federal Reserve governor Christopher Waller signalled his support for another interest rate cut, boosting the odds of a rate cut to 73%.

In Indonesia, headline inflation eased in November according to data released on Monday, providing room for the central bank to consider easing policy.

“In countries such as Indonesia, priority has been placed on currency stability and rate cuts have been postponed despite an economic slowdown, which could have a negative impact on the domestic economy,” said Ryota Abe, an economist at SMBC.

Analysts are closely monitoring inflation data across Asia this week, with South Korea’s November inflation coming in below expectations and reports from the Philippines, Taiwan, and Thailand due later this week.

The Thai baht rebounded to add 0.4% after data showed a 28% year-to-date increase in foreign tourist arrivals, while another projected 4% growth in exports, both crucial for Southeast Asia’s second-largest economy.

Tourism contributed a substantial 68.2% to Thailand’s GDP in 2023 and serves as a key source of employment for the nation.

Traders also reacted to Finance Minister Pichai Chunhavajira’s statement suggesting further rate cuts due to low inflation, ahead of the next policy review on Dec 18.

Equities in the region rallied, with technology stocks leading the charge. Shares in Taiwan, South Korea, Japan and Indonesia climbed more than 1% each, taking cues from record highs on Wall Street overnight.

Shares in Singapore rose 1.3% to its highest since November 2007, while MSCI’s broadest Asia-Pacific shares index jumped over 1% — its steepest rise in three weeks.

Uploaded by Magessan Varatharaja