EMERGING MARKETS-Asia FX slips as dollar gets data boost; Malaysia stocks slide

  • 6/4/2021
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* S.Korea"s won slips for a third straight day * Indonesia"s shares snap six-day winning streak * Philippines" annual inflation in May remains steady By Sameer Manekar June 4 (Reuters) - Most Asian currencies slipped on Friday, with the South Korean won and Thai baht leading declines, as positive economic data from the United States supported the dollar and again raised concerns of policy tightening by the Federal Reserve. Regional equities were largely muted, though Malaysian shares lost nearly a percent as the country grapples with a surge in coronavirus infections and fresh lockdowns. The won weakened 0.5% and was set for its third consecutive session of losses, while the baht slipped 0.3% as the U.S. dollar hit multi-week highs after strong private payrolls data on Thursday. All eyes now turn to U.S. May non-farm payrolls data later in the day, where a significant jump in the number of jobs added is expected, providing more fodder to talk of the Fed moving away from its current dovish policy settings. "We expect Asian equities and currencies to be on the back foot today given the lead from the U.S. but traction will be limited ahead of the U.S. data," said Mitul Kotecha, chief EM Asia and Europe strategist at TD Securities. "We see prospect for a bigger bounce in the U.S. dollar over the short term against Asian FX, assuming that payrolls are not overly weak." So far, Asia"s risk-sensitive markets have held firm on the Fed"s assurances that its policy will remain dovish in the near-term, but signs of strong economic recovery raise bets for higher inflation and an earlier tapering of stimulus. Most regional currencies were on track to post weekly losses with the exception of Malaysia"s ringgit, which was set to bag a modest gain. Shares in Kuala Lumpur declined as much as 0.9% and the ringgit weakened about 0.2% on Friday. Malaysia reported 8,209 new daily coronavirus cases and 103 new deaths on Thursday. "Successful containment of COVID spread over the coming weeks could see ringgit softness dissipate or even play catch up with Asian peers excluding Japan," analysts at Maybank said. In the Philippines, shares recovered some ground lost in the previous session, while the peso was largely unchanged after the archipelago"s annual inflation in May remained steady for a third straight month. Indonesian stocks snapped a six-day winning streak, while the rupiah depreciated 0.3% to its lowest in a week. India"s Nifty 50 edged higher in the early trade to hover near record highs. India"s central bank is expected to keep interest rates at record lows and reiterate its commitment on liquidity later on Friday. "The Reserve Bank of India (RBI) would have been justifiably expected to ease further in response to the devastating COVID crisis. But (it) will probably stay on hold with regards to headline policy tools," Mizuho bank said in a note. HIGHLIGHTS: ** Indonesian 10-year benchmark yields rise 1.6 basis points to 6.470% ** Philippine c.bank sees CPI within target by second-half ** Vietnam approves China"s Sinopharm vaccine for use against COVID-19 Asia stock indexes and currencies at 0411 GMT COUNTRY FX RIC FX FX INDE STOCK STOCK DAILY YTD X S S YTD % % DAILY % % Japan +0.05 -6.3 <.N2 -0.4 5.46 4 25> China 5 EC> India +0.00 +0.2 <.NS 0.08 12.31 2 EI> Indones -0.14 -1.8 <.JK -0.55 1.32 ia 2 SE> Malaysi -0.15 -2.5 <.KL -0.39 -2.63 a 7 SE> Philipp -0.08 +0.4 <.PS 0.02 -4.85 ines 2 I> S.Korea 2 11> Singapo +0.02 -0.4 <.ST -0.08 11.20 re 8 I> Taiwan +0.03 +2.8 <.TW -0.63 16.33 4 II> Thailan -0.19 -3.9 <.SE 0.09 11.70 d 7 TI> (Reporting by Sameer Manekar in Bengaluru; Editing by Kim Coghill) Our Standards: The Thomson Reuters Trust Principles.

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