Chinese yuan holds ground as dollar keeps most Asian currencies under pressure
* Investor risk appetite dampened by dollar's strength
* Markets lean towards 75-bp hike ahead of U.S. CPI data
* China stocks up 0.3%
By Riya Sharma
Aug 8 (Reuters) - Most Asian currencies weakened on Monday after a robust U.S. jobs report bolstered the dollar, while the Chinese yuan steadied after weekend data showed the country's exports unexpectedly picked up speed in July.
The yuan CNY=CFXS traded flat for most parts of the session, with some inclination towards upward movement, and equities in Shanghai .SSEC gained 0.3%, while the Thai baht THB=TH led losses among broadly weaker Asian currencies, skidding 0.8%.
U.S. payrolls data on Friday defied recession fears as jobs growth unexpectedly surged in July, bolstering the case for more super-sized interest-rate hikes by the Federal Reserve and, in turn, sending the dollar soaring.
"The huge outperformance in (the) U.S. July jobs report drove markets to lean towards a 75-basis-point hike in the September (Fed) meeting with a 70% probability," Yeap Jun Rong, a market strategist at IG, wrote in a note.
The dollar built on the strong gains made after the jobs report and riskier Asian currencies came under pressure. U.S. consumer price data for July is due for release on Wednesday.
Chinese data out over the weekend showed unexpectedly strong July exports, up 18% from a year earlier.
"Despite worries about the possibility of a recession and the consequent decline in China's external demand, a resilient trade surplus and solid export figures continued to keep the Chinese yuan steady and prevented it from weakening," said Khoon Goh, head of Asia research at ANZ.
China's trade growth so far this year has been far stronger than anticipated and "it is noteworthy that a revival of demand from emerging markets such as ASEAN and India contributed to China's recent export resilience," Jingyang Chen, Asian FX strategist at HSBC, wrote in a note.
The risk-averse sentiment in Asia also plagued equity markets, with stocks in Kuala Lumpur .KLSE and Singapore .STI falling 0.7% and 0.8%, respectively. Equities in Seoul .KS11 and Mumbai .NSEI reversed early losses to gain 0.1% and 0.5%, respectively.
The Indian rupee INR=IR added to its losses against the dollar, falling 0.5%, in line with its Asian peers. The Reserve Bank of India on Friday hiked the key interest rate by 50 basis points to cool soaring inflation.
According to a Reuters poll, Thailand's central bank on Aug. 10 will raise interest rates for the first time in four years, shifting its focus from economic growth to rising inflation.
The baht weakened by the most among Asian currencies on Monday but part of that move was largely because of a bit of a payback from the currency's strength seen last week, said Goh, adding that expectations of higher interest rates should help limit the weakness. HIGHLIGHTS: ** Indonesian 3-year benchmark yields up 0.8 basis point at 6.058% ** Top losers on the FTSE Bursa Malaysia Kl Index .KLSE include Top Glove Corp Bhd TPGC.KL , down 2.48%, and PPB Group Bhd PEPT.KL , down 2.18% Asia stock indexes and currencies
at 0723 GMT
FX INDE STOCK STOCK
DAILY YTD %
S S YTD
-0.25 -14.9 <.N2 #VALU #VALU
<CNY=CFX +0.06 -5.97 <.SS 0.31 -11.0
-0.41 -6.57 <.NS 0.74 0.99
-0.07 -4.36 <.JK -0.35 7.27
-0.10 -6.61 <.KL -0.62 -4.80
-0.02 -8.21 <.PS 0.45 -9.66 es
<KRW=KFT -0.62 -9.00 <.KS 0.09 -16.2
7 Singapore SGD=
+0.09 -2.25 <.ST -0.53 4.54
-0.23 -7.76 <.TW -0.10 -17.5
-0.57 -6.65 <.SE -0.36 -3.76
Graphic: World FX rates Link
Asian stock markets Link
Reporting by Riya Sharma in Bengaluru; Editing by Subhranshu
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