EMERGING MARKETS-Most emerging Asian currencies gain; equities muted in holiday lull

  • 2/11/2021
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* Long bets cut on Asian FX on dollar resilience- poll * Malaysia"s economy posts biggest annual decline since 1998 crisis * Philippine c.bank keeps rates steady as expected * Most markets closed on Friday for Lunar New Year By Shruti Sonal Feb 11 (Reuters) - Most emerging Asian currencies had marginal gains on Thursday as the dollar slipped to a two-week low following soft U.S. inflation data, while equities were muted due to light trading as the Lunar New Year holidays began. The Singapore dollar, Indian rupee and the Indonesian rupiah all rose 0.1%, even though volumes remained thin. The dollar was pinned near two-week lows, with softer-than-expected U.S. inflation and the Federal Reserve vowing to keep interest rates low weighing on the greenback. News that India and China have agreed to pull back troops from a bitterly contested lake area high in the western Himalayas after a months-long standoff also aided the rupee, Rahul Gupta, Head Of Research-Currency at Emkay Global Financial Services, said. Philippine peso was largely unchanged after the central bank held rates in a widely expected move, adding that current monetary policy settings were appropriate as inflation is still expected to stay firmly within target. Meanwhile, a Reuters poll showed long positions on most Asian currencies were scaled back as investors grappled with unexpected resilience in the U.S. dollar at the start of the year. On the equities front, investors treaded cautiously, with China, Japan, South Korea and Taiwan all on holiday, while Malaysia and Singapore had shortened trading hours. Most markets in the region will be closed on Friday. Broader Asian shares rested at record highs as investors digested recent meaty gains and hoped for more global stimulus, with MSCI"s broadest index of Asia-Pacific shares outside Japan up 0.1%. Malaysian benchmark pared gains and closed 0.2% higher, having gained as much as 0.4%, as its economy fell at a faster-than-expected pace in the fourth quarter and posted its worst annual performance since the 1998 Asian Financial Crisis. Cushioning the blow, Bank Negara Malaysia governor Nor Shamsiah Mohd Yunus said growth will rebound going into 2021. Analysts too mirrored the expectation for a recovery. "Despite the lingering domestic challenges and uneven recovery, we expect the growth trajectory to improve from 2Q21 onwards aided by a low base effect, further improvement in the global economy, and gradual normalization in domestic activity", said Julia Goh, a senior Malaysia economist for UOB. "Malaysia"s vaccination program that is slated to begin in early March, as well as ongoing fiscal and monetary support will help to lift sentiment and growth". Highlights: ** Singapore"s 10-year benchmark yield is down 2.6 basis points at 1.023% ** Top losers on Thailand"s SETI include Union Plastic PCL; TU Dome Residential Complex Leasehold Property Fund TU-PFu.BK; AJ Advance Technology PCL down -7.14% at 0.13 baht Asia stock indexes and currencies at 0743 GMT COUNTRY FX RIC FX FX YTD INDEX STOCKS STOCKS DAILY % DAILY YTD % % % Japan +0.02 -1.25 <.N22 0 7.72 5> China C> India +0.09 +0.41 <.NSE 0.06 8.11 I> Indonesia +0.11 +0.54 <.JKS 0.11 3.84 E> Malaysia +0.04 -0.51 <.KLS 0.16 -1.71 E> Philippines -0.01 -0.06 <.PSI -1.29 -2.08 > S.Korea 1> Singapore +0.15 -0.26 <.STI -0.01 2.87 > Taiwan +0.00 +0.33 <.TWI 0 7.26 I> Thailand +0.00 +0.20 <.SET -0.62 4.01 I> (Reporting by Shruti Sonal in Bengaluru; Additional reporting by Nivedita Bhattacharjee; Editing by Krishna Chandra Eluri)

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