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EMERGING MARKETS-Asian FX lifted by China's reopening plans, Thai baht on sixth-day rally

Reuters · 01/05/2023 23:36
EMERGING MARKETS-Asian FX lifted by China's reopening plans, Thai baht on sixth-day rally

Thai baht rallies into sixth session of gains

Philippine stocks down 1% on 14-yr high Dec inflation

China's yuan firms on property support from govt

By Savyata Mishra


- The Philippine peso and the Thai baht rose firmly among emerging Asian currencies on Friday, buoyed by China's latest reopening plans, as investors awaited U.S. jobs data, after upbeat private payrolls fed market fears of more interest rate hikes.

The peso PHP= appreciated 0.3% against the dollar after the country's central bank pledged further action to tackle inflation, which hit a 14-year high in December.

Aiding the currency's moves was a "decline in global crude oil prices during the week that could ease inflationary pressures and help the country's trade deficit/ imports," said Michael L. Ricafort, a chief economist at Rizal Commercial Banking Corp.

The Thai baht THB=TH was set to clock the best weekly gain among its peers, up 2%. It rose for the sixth straight session as hopes of increased tourism from China as it gradually reopens its borders.

China's rapid unwinding of stringent COVID rules that have battered its economic growth have fanned optimism of a recovery in 2023, and kept Asian markets buoyant during the week.

The yuan CNY=CFXS rose 0.4%.

The dollar =USD held an almost one-month high on Friday as market bets on further rate hikes strengthened after data on Thursday pointed to a still-tight labour market.FRX/

"Coming ahead of the -farm payrolls report, we see scope for some -term dollar strength as a result," MUFG Bank analyst Jeff Ng said.

U.S. jobs data later in the day could provide clues on how aggressive the Federal Reserve will be in tightening policy this year.

The Indonesian rupiah IDR= was down 0.1%, the Malaysian ringgit MYR= fell 0.2% while the Japanese yen JPY= was down 0.4%.

The yen has weakened over 2% against the dollar during the week. Earlier in the week, Prime Minister Fumio Kishida reiterated his resolve to maintain ultra-loose monetary policy to sustainably achieve 2% inflation.

The Singaporean dollar SGD= rose 0.2%, South Korean won KRW=KFTC gained 0.6%,

Still, the dollar's vice grip on FX markets will loosen a bit this year, according to a Reuters poll, where analysts expect most currencies to post marginal gains against the greenback over the coming 12 months.

Among Asian equities, Philippine stocks .PSI fell 1%, while those in Malaysia .KLSE dipped 0.4%.

Shares in Indonesia .JKSE, which tumbled 2% in the last session on of China's partial easing of its Australian coal imports ban, were up 0.4%.

Thai stocks .SETI gained 0.8%, while Seoul stocks .KS11 climbed 1.2% on chipmakers boost.


HIGHLIGHT:

** China's deeply troubled property sector is set to see home sales fall for the second straight year in 2023, but the pace of declines will ease thanks to state support measures and the lifting of the government's strict anti-COVID policies

** Indonesia's foreign exchange reserves rose to $137.2 billion at the end of December, the highest in months, the central bank said on Friday



Asia stock indexes and currencies at 0840 GMT




COUNTRY

FX RIC

FX DAILY %

FX YTD %

INDEX

STOCKS DAILY %

STOCKS YTD %

Japan

JPY=

-0.29

-2.00

.N225

0.72

-0.31

China

CNY=CFXS

+0.41

+0.67

.SSEC

0.37

2.51

India

INR=IN

+0.10

+0.30

.NSEI

0.00

-0.62

Indonesia

IDR=

-0.13

-0.38

.JKSE

0.31

-2.57

Malaysia

MYR=

-0.18

+0.16

.KLSE

-0.21

-1.18

Philippines

PHP=

+0.43

+0.16

.PSI

-0.78

2.16

S.Korea

KRW=KFTC

+0.59

+0.20

.KS11

1.35

2.63

Singapore

SGD=

+0.14

-0.26

.STI

-0.16

1.11

Taiwan

TWD=TP

-0.05

-0.06

.TWII

0.52

1.68

Thailand

THB=TH

+0.25

+1.93

.SETI

0.69

0.40



(Reporting by Savyata Mishra in Bengaluru; Editing by Kim Coghill)

((Savyata.Mishra@thomsonreuters.com;))