Asian FX slips as dollar firms on rate-hike bets, AI stocks extend recovery
TLT•Asian currencies weakened as hotter-than-expected US inflation and hawkish Federal Reserve remarks lifted rate-hike bets and strengthened the dollar. South Korean and Taiwanese stocks rose 2.6% and 3.6%, respectively, as AI-linked shares extended their recovery.
1. Dollar gains, currencies weaken
The dollar approached a two-week high in Asian trade after US inflation data and hawkish remarks from Federal Reserve officials raised expectations of a rate hike next month. The Thai baht fell 0.5%, while the Malaysian ringgit weakened to 4.075 per dollar, its lowest level in a week.
2. AI shares extend rebound
South Korean and Taiwanese stocks closed up 2.6% and 3.6%, respectively, extending a recovery from a recent AI-led selloff. Strong earnings from CoreWeave helped reassure investors about demand for AI infrastructure. The South Korean won gained 0.6% to 1,334.16 per dollar, bucking the broader currency trend.
3. Rupiah near record low
Indonesia's rupiah weakened to 18,175 per dollar, close to its June all-time low of 18,190, while Indonesian stocks fell 0.2% ahead of MSCI's November index review. Investors remained cautious after MSCI warned Indonesia could risk losing its emerging-market status.
