Image from The Nation Thailand/ANN
BANGKOK (Reuters): The Taiwan dollar hit a more than three-week low on Monday even as equities rose following the victory of the country's Democratic Progressive Party in the presidential election, while Thailand's baht advanced the most since mid-December.
Taiwan's currency fell about 0.4%, hitting its lowest level since Dec. 21 at 31.284 per dollar, while its stocks climbed around 0.2%.
The Democratic Progressive Party's candidate Lai Ching-te won the presidency on Saturday for the third consecutive term, but the party lost its parliamentary majority.
Analysts expected a potential downturn in Taiwan stocks this week following a 25% rise in just over one year as a lack of a parliamentary majority could complicate Lai's spending plans.
However, Citi analysts said the Taiwan dollar would likely outperform after election volatility settles.
"The market is likely to shift focus back to fundamental factors of a better semiconductor industry outlook and lower global yields, which is more likely to increase foreign flows and be supportive for TWD," they said in a note.
Meanwhile, the Chinese yuan remained unchanged after the central bank surprised markets with a rate pause, though it injected liquidity to support the beleaguered economy.
Other Asian currencies, including the Indonesian rupiah, Malaysian ringgit, Singapore dollar and the Philippines peso traded mostly flat to marginally lower, while the South Korean won fell as much as 0.7% to hit a more than one-month low.
The Thai baht was the outlier, climbing as much as 0.8%. The Bank of Thailand said in a policy review that adjusting interest rates would not fix an uneven economic recovery, highlighting a divergence of views between the government and the central bank.
The low-yielding baht lost about 0.6% in the previous week, after the country's prime minister raised concerns over high interest rates and economic conditions in a meeting with the central bank governor.
Thailand's central bank is scheduled to hold its monetary policy review on Feb 7, after keeping interest rates steady since November 2023, while Bank Indonesia is expected to keep rates unchanged later this week.
Among Asian stocks, Philippines, Malaysia, Singapore and South Korea logged gains, rising between 0.1% and 0.6%. Japan's Nikkei scaled a 34-year peak to close at 35,901.79 points, driven by banks and shipping companies. - Reuters
