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EMERGING MARKETS-Most Asian currencies strengthen as dollar holds soft tone

· 02/08/2021 00:31
EMERGING MARKETS-Most Asian currencies strengthen as dollar holds soft tone

Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

Taiwan's stock and bond markets closed until Feb. 16

Thailand, India, Indonesia gain more than 1% each

Gains in oil prices support energy firms

By Shruti Sonal

- Most emerging Asian currencies strengthened against the dollar on Monday as the greenback nursed losses following disappointing U.S. jobs data, while stocks climbed in subdued trade ahead of the Lunar New Year holiday.

The dollar index =USD weakened against a basket of six major currencies, after falling 0.6% on Friday, as data at the end of last week showed the U.S. economy created fewer jobs than expected in January. FRX/

The Thai baht THB=TH, South Korean won KRW=KFTC, Indonesian rupiah IDR= and the Malaysian ringgit MYR= gained between 0.1% and 0.5%.

"Going forward, the dollar index will likely rebound along with the rising 10-year U.S. treasury yield, considering the U.S. economic recovery and U.S. President Joe Biden's $1.9 trillion coronavirus relief package, said Gao Qi, FX strategist for EM Asia at Scotiabank.

"Meanwhile, EM Asian currencies are expected to continue benefiting from improving risk sentiment".

"It means we could see the dollar's divergent performance versus EM Asian currencies including the CNY, CNH and INR in the coming weeks", he added.

The Taiwan dollar <TWD=TP, best performing currency in the region so far this year, added over 1% despite the central bank's attempts to crackdown on speculation of the currency.

Taiwan's central bank said on Sunday it had banned Deutsche Bank DBKGn.DE from trading Taiwan dollar deliverable and non-deliverable forwards and suspended it for two years from trading forex derivatives. nL1N2KD035

The currency is at its strongest in more than 23 years against the U.S. dollar in a rally fuelled by rising global demand for tech products of the island's trade-dependent economy.

Most shares in the region strengthened, tracking broader gains in global equities, on hopes a $1.9 trillion COVID-19 aid package will be passed by U.S. lawmakers soon. MKTS/GLOB

Thai .SETI, Indian .NSEI and the Indonesian .JKSE benchmarks added over 1% each. Malaysia .KLSE gained as much as 0.5% after government data showed the country's industrial production index rebounded in December after two months of decline. nB8N2DT01B

Energy stocks across the region saw solid gains as Brent oil futures neared $60 a barrel, boosted by supply cuts among key producers and hopes for further U.S. economic stimulus measures stoking demand. O/R

Thailand's PTT PCL PTT.BK and Malaysian heavyweight Petronas Chemicals Group PCGB.KL inched nearly 4% higher.

However, trading volumes remained low ahead of the Lunar New Year holiday in most markets. Taiwan's stock and bond markets were closed starting Monday until Feb. 16, while Chinese financial markets will be closed for a week starting Thursday.


Highlights:


** Thailand's 10-year government bond yields are up 3 basis points at 1.3%

** Top gainers on the Jakarta stock index .JKSE include Pool Advista Finance Tbk PT POLA.JK, Alfa Energi Investama Tbk PT FIRE.JK, Djasa Ubersakti Tbk PT PTDU.JK



Asia stock indexes and currencies at 0526 GMT




COUNTRY

FX RIC

FX DAILY %

FX YTD %

INDEX

STOCKS DAILY %

STOCKS YTD %

Japan

JPY=

-0.11

-2.12

.N225

1.84

6.79

China

CNY=CFXS

+0.13

+1.09

.SSEC

0.95

1.62

India

INR=IN

+0.09

+0.28

.NSEI

1.28

8.11

Indonesia

IDR=

+0.14

+0.29

.JKSE

0.96

3.88

Malaysia

MYR=

+0.22

-0.96

.KLSE

0.12

-2.87

Philippines

PHP=

+0.01

-0.05

.PSI

0.08

-1.61

S.Korea

KRW=KFTC

+0.38

-2.97

.KS11

-0.49

8.07

Singapore

SGD=

+0.08

-0.92

.STI

0.79

3.03

Taiwan

TWD=TP

+1.42

+1.75

.TWII

0.61

7.26

Thailand

THB=TH

+0.13

-0.20

.SETI

1.16

4.46


(Reporting by Shruti Sonal in Bengaluru; Editing by Jacqueline Wong)

((Shruti.Sonal@thomsonreuters.com; Twitter: @shrutisonal26;))