Asian FX gains after weak U.S. data, Fed pause in focus

Reuters

Asian FX gains after weak U.S. data, Fed pause in focus

9. Jun. 2023 um 5:06 vorm. GMT

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Baht hits one-week high

Ringgit set to lose 0.8% this week

Lira hits record low, down as much as 1.8%

Asian equities trade mixed

By Roushni Nair

June 9 (Reuters) -Most Asian currencies strengthened on Friday, with Thailand's baht leading the charge, after a jump in U.S. weekly jobless claims hardened expectations of a pause in the Federal Reserve's policy tightening cycle when it meets next week.

The Thai baht climbed as much as 0.7% to a one-week high, though, it is down 0.3% so far this week. South Korea's won KRW=KFTC and the Malaysian ringgit MYR= advanced 0.6% and 0.2%, respectively.

Poon Panichpibool, a markets strategist with Krung Thai Bank, foresees an end to interest rate increases by the Fed for the remainder of this year.

"I think they will keep the policy rate at 5% to 5.25% for maybe most of the year, though, they (the Fed) might decide to cut in the late fourth quarter, if the U.S. economy enters a recession," he said.

The number of Americans filing new claims for unemployment benefits surged to the highest in more than 1-1/2 years last week, data which led to a retreat in the U.S. dollar as investors took it as an indication of a slowing labour market.

The dollar index =USD was last down 0.1% at 103.4 by 0404 GMT.

In Turkey, the lira TRYTOM=D3 hit its lowest level on record, down as much as 1.8%, ahead of the expected appointment of a new central bank governor.

The currency, which showed an easing in its sell-off in the previous session, stood at 23.54 against the U.S. dollar by 0341 GMT.

Among other currencies, the Philippine peso PHP= and Singapore dollar SGD= weakened 0.1% each.

The Philippine central bank said on Thursday it will cut banks' reserve requirement ratios (RRR) to ensure stable domestic credit conditions, moving to offset the expiration of liquidity-enhancing relief measures for lenders during the pandemic.

The Bangko Sentral ng Pilipinas, however, reiterated that a lower RRR did not indicate a shift in its monetary policy stance.

In Malaysia, factory output shrank by 3.3% in April, government data showed, below expectations of a 2% expansion according to 13 economists surveyed in a Reuters poll.

In China, inflation data, and particularly the producer prices, once again highlighted weakness in the manufacturing sector and an economy struggling for lift-off after COVID.

China's yuan CNY=CFXS weakened 0.2%, while, shares in the country was largely unchanged.

Equity markets in the region traded mixed, with shares in Mumbai .NSEI and Manila .PSI retreating 0.1%, each. On the positive ledger, shares in Taiwan .TWII and South Korea .KS11 advanced 0.8% and 0.9%, respectively.

HIGHLIGHTS:

** Malaysia's April industrial production falls 3.3%

** China's factory deflation steepens as demand wanes

** Philippines posts $4.53 bln trade deficit for April

** Indonesia's forex reserves drop to $139.3 bln at end-May

Asia stock indexes and currencies at 0331 GMT
COUNTRY	FX RIC	FX DAILY %	FX YTD %	INDEX	STOCKS DAILY %	STOCKS YTD %
Japan	JPY=	-0.24	-5.84	.N225	1.90%	25.39%
China	CNY=CFXS	-0.13	-3.11	.SSEC	-0.01	4.01
India	INR=IN	+0.11	+0.30	.NSEI	0.00	2.92
Indonesia	IDR=	+0.25	+4.79	.JKSE	-0.07	-2.76
Malaysia	MYR=	+0.15	-4.56	.KLSE	0.04	-8.05
Philippines	PHP=	-0.06	-0.63	.PSI	0.10	-0.31
S.Korea	KRW=KFTC	+0.66	-2.37	.KS11	0.90	17.80
Singapore	SGD=	-0.05	-0.25	.STI	-0.06	-2.04
Taiwan	TWD=TP	-0.02	-0.19	.TWII	0.93	19.46
Thailand	THB=TH	+0.53	-0.19	.SETI	-0.23	-6.76