Emerging Markets-Peso, Baht Lead Asia FX Declines, Indian Rupee Gains Ahead Of U.S. Jobs Data

Asian currencies were largely mixed on
Thursday, with the Philippine peso and the Thai baht leading
declines as rising coronavirus cases in the region weighed on
sentiment, while the Indian rupee hovered near a three-month
high.
Investors now await the U.S. August non-farm payrolls data
due Friday, which could give more clarity on the U.S. Federal
Reserve’s timeline on tapering of asset purchases, with a weaker
jobs number likely adding further pressure on the U.S. dollar.

Among regional equities, South Korean stocks lost
nearly 1% and shares in Malaysia and Indonesia
shed about 0.3% each, while India’s Nifty 50 and the
Philippine bourse advanced more than 0.5%.
The Philippine peso weakened for a second straight
day, making a rocky start to September after adding 0.7% in
August, as the country crossed 2 million COVID-19 cases on
Wednesday, with a fifth of those recorded last month.

“Regional peers Indonesia, Thailand and Malaysia are also
seeing tentative easing off or stabilization in daily COVID-19
case counts, while the contagion trajectory remains on an
uptrend in Philippines,” analysts at Maybank said in a note.
“With COVID-19 risks intact, recovery in the Philippine peso
could be choppy, particularly against regional peers.”
Data on Wednesday showed factory activity in the Philippines
contracted in August for the first time since May, in line with
some other regional economies as well as top trading partner
China as a resurgence in new infections disrupted supply chains.

The Thai baht depreciated 0.5% against the U.S.
dollar in its biggest drop in nearly a month, as the country
started lifting movement curbs even as the threat of rising
COVID-19 cases persists.
Indonesia along with Thailand, two of the biggest economies
in Southeast Asia, have started easing COVID-19 curbs after
seeing cases fall, while health experts say a resurgence in new
infections is likely due to low vaccination rates.
The Indian rupee traded at 72.9925 per dollar as at
0630 GMT, lingering near a June 11 peak despite the country
registering its highest number of new infections in two months
on Thursday.
South Korea’s won snapped a four-day rally to hit
a nearly three-week high, after data showed August consumer
inflation stayed at a nine-year peak.
“South Korea’s elevated consumer price index reading for
August justifies to some extent Bank of Korea’s decision to
begin the process of monetary accommodation withdrawal,”
analysts at Mizuho Bank said.

– Reuters