U.S. dollar weakness and easing China COVID curbs boost Asian currencies
Most Asian emerging currencies
strengthened on Monday as a weaker U.S. dollar and signs of
China easing its strict zero-COVID strategy lifted risk
sentiment, with the yuan leading gains alongside Vietnam’s dong.
The yuan rose 1.4% against the dollar, hitting
its highest since Sept. 13, while stocks in Shanghai
On Sunday, more Chinese cities announced an easing of
coronavirus curbs, spurring the world’s second-largest economy
to move towards softening its stance on the zero-COVID strategy
that prompted unprecedented protests last weekend.
The easing COVID curbs raised hopes over the global growth
outlook and increased demand for commodities in Southeast Asia’s
biggest trading partner, thereby boosting investors’ appetite
for riskier assets.
“A China shifting towards a more dynamic, flexible COVID
strategy would reduce the risk of weaker growth and should boost
optimism on China and related assets,” analysts at Barclays
The dollar index, which measures the greenback
against six major peers, fell 0.2% to 104.23.
Analysts at Morgan Stanley upgraded their stance on
emerging markets as well as China to “overweight,” underpinned
by Beijing’s easing COVID policy and the resultant likely
normalization in the economy, as well as a sustained weakening
in the U.S. dollar.
The Vietnamese dong appreciated 1.9% and posted its
best session since Sept. 2010 on broader weakness in dollar and
inflows from foreign borrowings by Vietnam Technological And
Commercial Joint Stock Bank and Masan Group,
according to a market source.
Malaysia’s ringgit, which has lost 4.6% so far this
year, firmed 0.5% to hit its highest level since May 6. Since
last week, the currency has drawn support from the appointment
of Anwar Ibrahim as prime minister.
Anwar, who will also serve as Malaysia’s finance minister,
announced new cabinet appointments on Friday. Markets are now
waiting for a revised 2023 budget before the year end.
“The unveiling of the new cabinet ‘relatively’ quickly
helped remove some political uncertainty,” analysts at Maybank
wrote in a note.
Elsewhere, the Philippines lowered its economic growth
target for 2023, taking into account an anticipated weakening in
global activity, but kept its expansion goals for the succeeding
The peso depreciated 0.2%, while stocks in Manila
Equities in Asia were mixed, with South Korea’s benchmark
index and stocks in Mumbai shedding 0.6% and
0.3%, respectively. Singapore’s benchmark index added
Markets in Thailand were closed on account of a public
** China c.bank extends bilateral currency swap agreement
with Macau for three years
** Indonesia c.bank says digital rupiah currency can be used
** Indonesian 10-year benchmark yields rise 3.7 basis points
The following table shows rates for Asian currencies against
the dollar at 0625 GMT.
Asia stock indexes and currencies at
COUNTRY FX RIC FX FX INDE STOCKS STOCKS
DAILY % YTD % X DAILY YTD %
Japan -0.21 -14.4 <.n2>
India -0.32 -8.89 <.ns ei>
Indonesi +0.10 -7.53 <.jk a se>
Malaysia +0.46 -4.56 <.kl se>
Philippi -0.21 -8.64 <.ps nes i>
Singapor +0.45 +0.25 <.st e i>
Taiwan +0.49 -9.08 <.tw ii>
Thailand – -3.90 <.se ti>
(Reporting by Upasana Singh in Bengaluru, additional reporting
by Tom Westbrook in Singapore; Editing by Dhanya Ann Thoppil)
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