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EMERGING MARKETS-Philippine peso weakens; Indian rupee near 3-month high

reuters.com · 09/01/2021 03:26
EMERGING MARKETS-Philippine peso weakens; Indian rupee near 3-month high

Peso weakens most in nearly four weeks

Indian rupee at highest since June 11

China factory activity contracts in Aug

By Sameer Manekar

- The Philippine peso led losses among largely mixed currencies in Asia as a raft of weak regional data weighed on sentiment, while the Indian rupee strengthened on Wednesday to its highest in nearly three months on strong quarterly economic growth.

Equities in the region were also mixed, with India's Nifty 50 .NSEI scaling a record level for the fourth straight day, while shares in the Philippines .PSI and Malaysia .KLSE both lost more than half a percent.

A raft of IHS Markit data showed factory activity in Asia lost momentum in August due to a resurgence in coronavirus cases, with China - the region's biggest trading partner - logging a contraction for the first time since April last year. nZUN0037RQnZRN002P9BnZRN002P9DnL4N2Q30DT

Indian rupee INR=IN touched its highest since June 11 after logging in an almost 2% gain last month, and the Nifty 50 climbed 0.6% to mark its eighth straight session of gains after data showed economy grew more than 20% in the June quarter. nL1N2Q20Y9 .BO

The massive growth rate, however, fell short of the 21.4% expansion forecast by the Indian central bank.

"With this growth print illustrating the fragility of the overall economic recovery, and with risks still to the downside, we do not see the Reserve Bank of India's monetary policy committee normalizing policy in a hurry," Bank of America analysts said.

Analysts at the North Carolina, U.S.-based bank maintained their FY22 real GDP growth estimate for India at 9.3%, and expect the RBI to hike its reverse repo rate in the first half of 2022 and policy repo rate next June or August.

Nifty 50 reversed course later in the day to trade 0.2% lower, as of 0600 GMT.

The Philippine peso PHP= slipped as much as 0.9% after data showed manufacturing activity contracted in August, while equities in Manila .PSI declined more than 1% as daily coronavirus cases in the country touched a record high earlier in the week. nL4N2PO1ZU nL4N2Q314T

"With COVID-19 risks intact, recovery in the Philippine peso could be choppy, particularly against regional peers," analysts at Maybank said in a note.

Among other Asian currencies, the Malaysian ringgit MYR=, South Korean won KRW=KFTC, and the Taiwanese dollar TWD=TP each strengthened up to 0.3% as the U.S. dollar remained pinned near its three-week lows. USD/

Investor focus has shifted to U.S. non-farm payrolls data due later this week. A weaker August jobs number could support the case for the Federal Reserve prolonging its dovish stance, adding further pressure on the U.S. dollar.

Among equities, the Malaysian benchmark index .KLSE was the top loser, while Singapore shares .STI advanced more than 1% after closing 1.5% lower on Tuesday. .KS


HIGHLIGHTS:

** Indonesian rupiah IDR= slips 0.2%, equities .JKSE down 0.7%

** Indonesia's annual inflation rate edges up in August to highest in three months - nJ9N2NC01S

** S.Korea's won KRW=KFTC up 0.3% on its fourth day of gains


Asia stock indexes and currencies at 0638 GMT




COUNTRY

FX RIC

FX DAILY %

FX YTD %

INDEX

STOCKS DAILY %

STOCKS YTD %

Japan

JPY=

-0.19

-6.34

.N225

1.29

3.67

China

CNY=CFXS

-0.02

+1.03

.SSEC

0.61

2.66

India

INR=IN

+0.09

+0.17

.NSEI

-0.14

22.36

Indonesia

IDR=

-0.14

-1.72

.JKSE

-0.59

2.25

Malaysia

MYR=

+0.22

-3.04

.KLSE

-0.58

-2.16

Philippines

PHP=

-0.74

-3.98

.PSI

-1.01

-4.95

S.Korea

KRW=KFTC

+0.20

-6.14

.KS11

0.24

11.61

Singapore

SGD=

-0.02

-1.79

.STI

1.16

8.68

Taiwan

TWD=TP

+0.24

+2.81

.TWII

-0.09

18.61

Thailand

THB=TH

-0.22

-7.14

.SETI

-0.18

12.86


India Indian rupee highest since June 11https://tmsnrt.rs/3Dxnpkm

(Reporting by Sameer Manekar in Bengaluru, Editing by Sherry Jacob-Phillips)

((Sameer.Manekar@thomsonreuters.com; +918061823447;))