EMERGING MARKETS-Asian currencies rise on weak dollar, Indonesian rupiah gains

By Upasana Singh

March 31 (Reuters) – Asian currencies climbed on Friday against a weaker U.S. dollar, with the Indonesian rupiah among the region’s top gainers, as concerns over recent banking turmoil eased and investors looked towards the outlook for global monetary tightening.

The rupiah IDR=, which has jumped about 4% so far this year, strengthened 0.5% to a near two-month high.

“In the near term, the rupiah could get more of a lift if there is further dollar weakness,” Maybank analysts said in a note.

“There could also be more foreign buying into Indo bonds if the Fed keeps softening its stance.”

The South Korean won KRW=KFTC rose 0.6%, while Malaysia’s ringgit MYR= appreciated 0.3%. China’s yuan CNY=CFXS and the Philippine peso PHP= were up 0.2% each.

Weakness in the dollar, which is tracking towards a second consecutive quarterly loss, boosted investors’ appetite for riskier Asian assets. FRX/

“Dollar weakness may continue in the coming sessions,” said Jeff Ng, senior currency analyst at MUFG Bank, although he did not rule out a potential rebound due to risk aversion or a change in expectations about the U.S. Federal Reserve’s moves.

Markets are awaiting the February reading for the personal consumption expenditures price index from the U.S., due later in the day, which is the metric by which the Fed measures its 2% inflation target and which may provide further clues on monetary policy tightening.

Three Federal Reserve officials kept the door open on Thursday to more rate rises aimed at lowering inflation, with two noting that banking sector problems could generate headwinds for the economy that cool price pressures faster than expected.

Equities across emerging Asia were broadly higher, with stocks in Seoul .KS11 climbing 0.9% and Shanghai equities .SSEC advancing 0.3%.

Singapore’s benchmark index .STI and Bangkok shares .SETI rose 0.2% each.

Elsewhere, data showed China’s manufacturing activity expanded at slower pace in March, suggesting that prospects of a strong post-COVID economic recovery are faltering amid weaker global demand and a continued property market downturn.

HIGHLIGHTS:

** South Korea’s factory output slumped while retail sales jumped in February, signalling an uneven economic recovery and bolstering the market’s view that the central bank will keep rates on hold for the rest of the year

** Core consumer inflation in Japan’s capital Tokyo slowed in March for a second month but remained well above the central bank’s 2% target

The following table shows rates for Asian currencies against the dollar at 0314 GMT.

COUNTRY

FX RIC

FX DAILY %

FX YTD %

INDEX

STOCKS DAILY %

STOCKS YTD %

Japan

JPY=

-0.21

-1.37

.N225

0.95

7.48

China

CNY=CFXS

+0.18

+0.60

.SSEC

0.27

5.85

India

INR=IN

+0.00

+0.46

.NSEI

0.00

-5.66

Indonesia

IDR=

+0.47

+3.94

.JKSE

-0.21

-0.82

Malaysia

MYR=

+0.32

-0.14

.KLSE

0.04

-4.70

Philippines

PHP=

+0.19

+2.52

.PSI

-1.08

0.10

S.Korea

KRW=KFTC

+0.57

-2.11

.KS11

0.93

10.71

Singapore

SGD=

+0.04

+0.96

.STI

0.15

0.33

Taiwan

TWD=TP

+0.13

+0.94

.TWII

0.12

12.24

Thailand

THB=TH

-0.04

+1.39

.SETI

0.18

-3.62

(Reporting by Upasana Singh in Bengaluru; Editing by Edmund Klamann)

((Upasana.Singh@thomsonreuters.com;))

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