Asian currencies, stocks rise on hopes of slowdown in Fed hikes, China reopening

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Thailand’s baht and South Korea’s won

led gains among strengthening Asian emerging currencies on

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Monday as investors scaled back bets for U.S. Federal Reserve

rate hikes, while reopening of China’s borders further lifted

risk sentiment.

The baht gained 0.9%, while Thai stocks

rose as much as 1%, both touching their highest levels since

April 2022.

“Given tourist receipts from China in Thailand accounted for

more than 3% of Thailand’s GDP in 2019, highest in Southeast

Asia, we expect Thailand to be the main beneficiary of China’s

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reopening,” analysts at OCBC wrote.

Beijing has now opened borders that had been all but shut

since the start of the pandemic, dismantling a final pillar of a

zero-COVID policy and allowing a surge in traffic across the

nation.

The yuan jumped to a near five-month high against

the dollar.

Meanwhile, Khoon Goh, head of Asia research at ANZ, said

that, along with ongoing optimism around China’s reopening,

weakness in the U.S. dollar had provided a further kick to

investor sentiment and had contributed to a rally in risk

assets.

The U.S. dollar was steady and the market dialed

back bets on Fed rate hikes after data on Friday showed a jump

in the U.S. workforce and easing wage growth, combined with a

sharp fall in service-sector activity.

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Across the region, currencies strengthened, with the South

Korean won gaining 1.9% to hit its highest level

since early June.

Indonesia’s rupiah added 0.4%, while Malaysia’s

ringgit and the Philippines’ peso strengthened

0.7%.

Major regional stock indexes were also higher. Equities in

the Philippines, India and Malaysia rose

between 0.5% and 1.4%.

Elsewhere, analysts warned of more volatility in Brazil’s

financial markets following the arrest of supporters of

far-right former President Jair Bolsonaro after they invaded the

country’s Congress, presidential palace and Supreme Court.

The Brazilian real, among the top performing emerging

currencies in 2022, had yet to trade on Monday, after being

under pressure earlier last week on concerns about the country’s

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fiscal health.

HIGHLIGHTS

** Top gainers on Thailand’s SETI include Muangthai

Capital PCL and Srisawad Corporation PCL

** Thailand’s three-year yield is down 1 basis point at

1.69%

** Indonesia’s 10-year benchmark yield is down 8.1 basis

points at 6.885%

Asia stock indexes and currencies

at 0428 GMT

COUNTRY FX RIC FX FX INDE STOCKS STOCKS

DAILY % YTD % X DAILY % YTD %

Japan +0.40 -0.33 <.n2>

China EC>

India +0.53 +0.53 <.ns ei>

Indonesi +0.35 -0.06 <.jk a se>

Malaysia +0.64 +0.62 <.kl se>

Philippi +0.69 +0.98 <.ps nes i>

S.Korea 11>

Singapor +0.33 +0.72 <.st e i>

Taiwan +0.50 +0.54 <.tw ii>

Thailand +0.87 +3.27 <.se ti>

(Reporting by Himanshi Akhand in Bengaluru)