Asian currencies rise against dollar as investors brace for Powell, US jobs report

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Emerging Asian currencies have appreciated

Wednesday against the US dollar, which plunged as investors

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turned cautious ahead of US Federal Reserve comments

President Jerome Powell later in this session and the crucial United States

monthly employment report on Friday.

Malaysian ringgit, South Korean won and Thai baht

traded higher as investors also braced for a rate decision

the Bank of Thailand.

Gains in riskier emerging market assets came even as

Chinese data showed factory activity around the world

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the second-largest economy contracted at a faster pace in November.

The US dollar index, which measures the greenback

against a basket of major currencies, fell 0.13% to 106.72.

“There is room for the dollar to relax a bit, but I

basically think there is still a bit of uncertainty

in 2023,” said Galvin Chia, emerging markets strategist for

Natwest Markets.

Emerging markets were sensitive to US rates

outlook, as aggressive monetary tightening by the Federal Reserve

this year has supported the dollar, putting pressure on the

currencies.

Many central banks in emerging Asia have sought to

support rate hikes in the United States to limit the risk of capital outflows.

In this context, Chia expected the Federal Open Market

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The committee meeting and printing of the November CPI in the United States is scheduled for

mid-December to watch closely.

In Asia, the Malaysian ringgit led the gains,

appreciating 0.8% and was on track for its best month since

March 2016. It has increased by more than 2% since Malaysia’s Anwar

Ibrahim was sworn in as prime minister last week but is still

down 6.5% since the start of the year.

The South Korean won rose 0.7% and was on track to

its biggest monthly gain since March 2016.

The Thai baht rose 0.3% and stocks gained

0.1% ahead of Bank of Thailand rate decision. Analysts in

a Reuters poll widely expects a modest 25 basis points

ascend.

Chia said the baht’s recent gains reflect optimism about

Thailand’s economic recovery which has lagged behind some of its peers.

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“The Thai baht has been a way of expressing (the) reopening

the dynamics and economic catch-up of the Southeast Asia region,

especially when it comes to things like tourism.

Thailand’s economy may miss expected 3.8% growth

next year due to a global economic slowdown, but this year

growth prospects of 3.4% should still be achieved, said the

the country’s finance minister on Tuesday.

The Indonesian rupiah strengthened 0.1%, ending a three-day period

a losing streak, while stocks added 0.1%. The currency has

lost 0.95% so far this month.

Indonesian central bank governor Perry Warjiyo said

Wednesday that energy subsidies next year will allow the Bank

Indonesia (BI) to raise interest rates in a measured way.

Across the region, stocks were mixed: India surged

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0.1%, Taiwan and South Korea up 0.8%

and 0.9%, respectively, while Singapore lost 0.2%.

STRONG POINTS:

**Indonesian benchmark 10-year yields are almost stable at 6.983%

** Thai industrial production unexpectedly drops 3.71% YoY in October

**Philippines central bank sees November inflation at

7.4-8.2%

** Markets in the Philippines are closed to the public

holiday

Asian Stock Indices and Currencies at 0428 GMT

COUNTRY FX RIC FX FX YTD INDEX STOCKS STOCKS

DAILY % % DAILY YTD %

%

Japan +0.07 -16.96 -0.46 -3.10

China

India +0.11 -8.94 0.14 7.44

Indonesiasi +0.06 -9.41 0.53 7.11

a

Malaysia +0.69 -6.93 -0.02 -3.95

Philippi – -9.85 – -4.80

nes

South Korea

Singapore +0.22 -1.59 -0.16 4.72

e

Taiwan +0.22 -10.39 0.77 -18.64

Thailand +0.41 -5.46 0.25 -1.76

(Reporting by Roushni Nair in Bengaluru; Editing by Ana

Nicolas de Costa)