Philippine peso, Thai baht firm on rate hike expectations

The Philippine peso and Thailand's baht rose on Thursday after inflation data this week raised the probability of more interest rate rises by their central banks to bring down soaring prices.

Other Southeast Asian currencies inched lower as global recession worries and the prospect of aggressive interest rate hikes by the U.S. Federal Reserve hurt risk sentiment.

The Singapore dollar USDSGD, Malaysia's ringgit USDMYR, China's yuan USDCNY and Taiwan dollar USDTWD fell 0.1% each.

The peso USDPHP appreciated 0.3% and the baht USDTHB gained 0.4%.

Annual inflation in the archipelago, which accelerated to 8% in November from a year earlier, strengthened the case for a 50 basis point (bps) hike by the Bangko Sentral ng Pilipinas (BSP) at its upcoming Dec. 15 meeting.

On Wednesday, data showed Thailand's headline CPI rose by 5.55% in November from a year earlier, marking its slowest pace in seven months although the pace far exceeds the central bank's target range of 1% to 3%.

The Bank of Thailand (BoT) has raised rates by a total of 75 bps since August, including the latest 25 bp hike in late-November.

"We continue to expect the BoT to continue hiking policy rates in 25bp increments until the policy rate reaches a terminal rate of 2.5% in Q3 next year," analysts at Goldman Sachs said in a note.

The dollar index DXY, which measures the greenback versus six peers, was up 0.1% to 105.27, adding pressure on regional currencies.

Investors are keenly awaiting inflation data from the U.S. and the policy-setting Federal Open Market Committee where a half-percentage point hike is expected, with just 9% odds for another 75 bps increase.

The two-day meeting will begin on Dec. 13.

Meanwhile, China on Wednesday announced the most sweeping changes to its resolute anti-COVID regime, such as allowing infected people with mild symptoms to quarantine at home.

However, China's easing of COVID curbs did not significantly impact emerging Asia.

"Such refinements might have been priced in by the market and we continue to watch death counts or any reports that healthcare capacity could come under strain in this re-opening wave," analysts at Maybank wrote in a note.

Equities across emerging Asia were mixed, with Indonesia's benchmark index COMPOSITE declining 1.4% and stocks in Singapore STI advancing 0.3%. Equities in Bangkok SET and Kuala Lumpur BURSA fell 0.4% and 0.2%, respectively.

The Philippine stock market was closed for a public holiday.

HIGHLIGHTS:

** China health officials to hold press conference on COVID measures

** Japan upgrades Q3 GDP as global recession, COVID risks linger

The following table shows rates for Asian currencies against the dollar at 0352 GMT.