Asian FX dragged lower by soaring dollar, Chinese yuan bucks trend

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Emerging Asian currencies turned to losses

on Monday after a strong U.S. payrolls report bolstered the

dollar, while the Chinese yuan steadied after weekend data

showed the country’s exports had picked up unexpectedly.

The baht led losses among broadly lower Asian

currencies, skidding as much as 0.7%, while the yuan

mostly traded flat, with some inclination towards upward

movement. Stocks in Shanghai gained 0.2%.

U.S. labor market data on Friday defied recession fears.

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Jobs growth surged unexpectedly in July, bolstering the case for

more super-sized hikes in interest rates by the Federal Reserve

and in turn sending the dollar soaring.

“The huge outperformance in (the) U.S. July job report drove

markets to lean towards a 75 basis-point hike in the September

(Fed) meeting with a 70% probability,” Yeap Jun Rong, market

strategist at IG, wrote in a note.

The dollar built on strong gains made after the jobs data

and riskier Asian currencies came under downward 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

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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.

Chinese trade growth 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 Singapore set to mark their worst

day in more than three weeks, while equities in Manila

and Kuala Lumpur were down 0.5% each.

According to a Reuters poll, Thailand’s central bank on

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August 10 will raise interest rates for the first time in four

years, shifting its focus from economic growth to rising

inflation.

“The baht has weakened by the most amongst the Asian

currencies today but part of that move is largely a bit of a

payback from the baht strength that we saw last week …,” said

Goh, adding that expectations of higher interest rates should

help limit the baht’s weakness.

Elsewhere, Myanmar’s central bank weakened its kyat currency

from 1,850 to 2,100 per dollar on Monday, according to a

statement published in a state newspaper.

HIGHLIGHTS:

** Indonesian 10-year benchmark yields are down 0.70 basis

points at 7.136%​​

** Top losers on FTSE Bursa Malaysia Kl Index include

Maxis Bhd down 2.12% and Press Metal Aluminium

Holdings Bhd down 2.08%

Asia stock indexes and

currencies at 0515 GMT

COUNTRY FX RIC FX FX INDE STOCK STOCK

DAILY YTD % X S S YTD

% DAILY %

%

Japan -0.23 -14.9 <.n2> E! E!

China EC> 8

India -0.43 -6.59 <.ns ei>

Indones -0.23 -4.52 <.jk ia se>

Malaysi -0.11 -6.62 <.kl a se>

Philipp -0.18 -8.36 <.ps ines i> 8

S.Korea 11> 7

Singapo -0.01 -2.34 <.st re i>

Taiwan -0.23 -7.76 <.tw ii> 2

Thailan -0.75 -6.82 <.se d ti>

(Reporting by Riya Sharma in Bengaluru; Editing by Bradley

Perrett)