Asian FX dragged lower by soaring dollar, Chinese yuan bucks trend
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.
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
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
August 10 will raise interest rates for the first time in four
years, shifting its focus from economic growth to rising
“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.
** 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!
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
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
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