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Asian currencies rise vs dollar as investors brace for Powell, U.S. jobs report

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Emerging Asian currencies rose on

Wednesday against the U.S. dollar, which dipped as investors

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turned cautious ahead of comments from the U.S. Federal Reserve

Chair Jerome Powell later this session and the crucial U.S.

monthly jobs report on Friday.

The Malaysian ringgit, South Korean won and Thai baht all

traded higher, as investors also braced for a rate decision from

the Bank of Thailand.

The gains in riskier emerging market assets came even as

Chinese data showed factory activity in the world’s

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

The U.S. dollar index, which measures the greenback

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

“There’s room for the dollar to ease a little bit, but I

think fundamentally there’s still a bit of uncertainty going

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

Natwest Markets.

Emerging markets have been sensitive to the U.S. rates

outlook, as the Federal Reserve’s aggressive monetary tightening

this year has buoyed the dollar, putting pressure on local

currencies.

Many central banks in emerging Asia have sought to keep in

step with U.S. rate hikes to limit the risk of capital outflows.

Against this backdrop, Chia expected the Federal Open Market

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Committee meeting and the U.S. November CPI print scheduled for

mid-December to be closely watched.

In Asia, the Malaysian ringgit led gains,

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

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

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

down than 6.5% so far this year.

South Korea’s won rose 0.7% and was on track for

its biggest monthly gain since March 2016.

Thailand’s baht rose 0.3% and stocks gained

0.1% ahead of the Bank of Thailand’s rate decision. Analysts in

a Reuters poll are widely expecting a modest 25-basis-point

rise.

Chia said recent gains in the baht reflects optimism about

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

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“The Thai baht has been one way to express (the) reopening

dynamics and economic catch-up in the Southeast Asian region,

particularly when it comes to things like tourism.”

Thailand’s economy may not reach a forecast growth of 3.8%

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

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

country’s finance minister on Tuesday.

The Indonesian rupiah firmed 0.1%, ending a three-day

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

lost 0.95% so far this month.

Indonesia’s central bank governor Perry Warjiyo said on

Wednesday that energy subsidies next year will allow 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%, with Taiwan and South Korea advancing 0.8%

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

HIGHLIGHTS:

** Indonesian 10-year benchmark yields almost flat at 6.983%

** Thai factory output unexpectedly falls 3.71% y/y in Oct

** Philippines central bank sees November inflation at

7.4-8.2%

** Markets in the Philippines are closed for a public

holiday

Asia stock indexes 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

Indonesi +0.06 -9.41 0.53 7.11

a

Malaysia +0.69 -6.93 -0.02 -3.95

Philippi – -9.85 – -4.80

nes

S.Korea

Singapor +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

Nicolaci da Costa)

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