What’s going on here?
The Malaysian ringgit climbed to near 1.5-year highs, but Nvidia’s bearish chip forecast dragged South Korean and Taiwanese stocks down.
What does this mean?
The Malaysian ringgit surged 0.4% to 4.323 per dollar, enjoying year-to-date gains exceeding 6% and rebounding from a 26-year low. This appreciation comes amid broader stability in Asian currencies, with the Thai baht rising 0.3% and minor gains seen in the South Korean won, Singapore dollar, Chinese yuan, and Taiwan dollar. Meanwhile, the Dollar Index edged slightly lower to 100.92, as investors anxiously await key US data, including next week’s labor market report and Friday’s personal consumption expenditures (PCE) index. In the equity markets, however, South Korean and Taiwanese benchmarks fell by 1.5% and 1.6%, respectively, after Nvidia’s downbeat forecast. This warning directly hit Taiwan Semiconductor Manufacturing, which dropped 2.8%, and Nvidia supplier SK Hynix, which plunged 6.8%.
Why should I care?
For markets: Chips are down in Asia.
After Nvidia’s disappointing forecast, chip sectors in South Korea and Taiwan took a significant hit, reflecting a broader caution among investors. As benchmarks in Bangkok, Manila, Kuala Lumpur, and Beijing also saw declines between 0.3% and 0.9%, the chip market’s health clearly has regional impact. Conversely, Jakarta stocks bucked the trend, rising 0.7% to notch their third record high in 10 days, powered by local political support for a new Jakarta governor.
The bigger picture: Global implications and shifts.
China’s recent increase in lending to Africa for the first time in seven years signals a renewed focus on international alliances, potentially boosting trade and economic growth across both regions. Meanwhile, in South Korea, President Yoon hinted at managing policy rates if the housing market heats up, reflecting a balancing act between stimulating economic growth and keeping inflation in check. Such strategic decisions can have lasting effects on regional and global markets as economies continue to navigate post-pandemic recovery.
