Asian currencies found some support on Friday after a volatile week, with the Singapore dollar and Thai baht creeping higher, while Malaysia's ringgit held its ground despite a slowdown in growth in the third quarter.
Stocks in the region were a mixed bag, as the Indonesian benchmark lost 1.3% to hit its lowest since early August. Philippine shares advanced more than 2%, after seven consecutive days of losses.
Emerging market assets have been under pressure since early last week on concerns that U.S. President-elect Donald Trump's proposed tariffs could further stoke inflation which could mean fewer interest rate cuts by the Federal Reserve.
Overnight, Fed Chair Jerome Powell said the central bank was not in a hurry to cut rates, indicating borrowing costs may remain higher for longer.
Higher-for-longer Fed rates would exert pressure on the local currencies and bonds as the greenback would get some boost.
Maybank analysts say upside risks remain for the dollar in the near term. Malaysian ringgit and Thai baht have lost 3% and 3.8%, respectively, since Nov. 5, as being open, trade-reliant economies, particularly with China, make them vulnerable to any tariff-related headwinds.
On Friday, the ringgit edged higher, while Malaysian stocks inched lower after third-quarter economic growth came in line with expectations but slowed from an 18-month high in the previous quarter.
"Looking ahead, we think GDP growth will drop back close to trend if, as we expect, a jump in inflation driven by the removal of food and fuel subsidies weighs on private consumption growth," said Shivaan Tandon, markets economist at Capital Economics.
The Thai baht added 0.4%, while shares in Bangkok inched lower after a Reuters poll showed Southeast Asia's second-largest economy likely reported its fastest growth in more than a year in the September quarter.
The rupiah hovered near its three-month low for a second consecutive day, slipping as much as 0.6% to 15,945 per dollar while the benchmark index in Jakarta declined for a third straight session.
In Sri Lanka, President Anura Kumara Dissanayake's coalition, the National People's Power, won a majority in a snap general election. Sri Lankan markets were closed on Friday.
HIGHLIGHTS:
** Indonesia's 10-year benchmark yield slips to 6.905%
** Indonesia Oct trade surplus less than expected
** Malaysia liberalising some foreign exchange policy to support investments, cbank says
** Malaysia dropped off U.S. Treasury's currency manipulation "monitoring list" - Reuters
