Most Asian currencies rise on dollar weakness, Indonesian rupiah at 6-week high

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The Indonesian rupiah rose to a more than

six-week high on Thursday as most Asian currencies gained

against a weaker U.S. dollar after softer-than-expected U.S.

inflation data tempered worries of aggressive rate hikes by the

Federal Reserve.

The rupiah and South Korea’s won jumped

0.6% each, while the Philippines Peso was marginally up.

Among other currencies, Malaysia’s ringgit and the Taiwan

dollar firmed 0.2% each.

“Risk appetite across global markets has been improving in

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recent times, and the rupiah being a high-carry currency in

particular has been a big beneficiary,” said Alvin Tan, head of

Asia FX strategy at RBC Capital Markets.

However, Indonesia remains a laggard in Southeast Asia that

is yet to raise its interest rate, after the Thai central bank

earlier this week raised its policy rates for the first time in

four years.

In the United States, consumer prices in July were flat

sequentially and increased by a weaker-than-expected 8.5%

year-on-year, primarily due to a drop in petrol prices since

mid-June.

With inflationary pressures still elevated, prices data will

continue to be in focus as the Fed considers if another outsized

rate hike is needed in September.

“Downside surprise in the U.S. July CPI reading last night

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reinforces our expectations for CPI to grind lower over time,

and for growth jitters to become more apparent into year-end,

which would support some retracement of 1H dollar strength in

second-half,” analysts from Maybank said in a note.

Traders are now pricing in a 50-basis-point hike next month,

rather than the 75-bp increase expected before the inflation

print.

In Asia, the Singapore dollar was flat after data

showed the city-state’s economy expanded less than estimated in

the second quarter and the government cut its 2022 growth

projections, flagging risks to the global outlook from the

Russia-Ukraine war and surging inflation.

The Chinese yuan eased 0.2% after export hub Yiwu

in Zhejiang province imposed a three-day lockdown to contain a

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recent COVID-19 outbreak.

Among stock markets in the region, the Philippines

jumped more than 3% in its best session since October, while

Malaysia, Indonesia and Taiwan rose in a

range of 0.7% and 1.7%.

HIGHLIGHTS:

** Indian rupee holds firm on hopes of less hawkish Fed

** Top gainers in Philippines include Robinsons Land Corp

, Ayala Land and Wilcon Depot,

rising in a range of 6.3% and 7%

** Indonesia’s benchmark 10-year yield down 7.022%

Asia stock indexes and currencies

at 0705 GMT

COUNTRY FX RIC FX FX INDE STOCKS STOCKS

DAILY % YTD % X DAILY YTD %

%

Japan +0.14 -13.2 <.n2> !

China EC>

India +0.09 -6.44 <.ns ei>

Indonesi +0.64 -3.55 <.jk a se>

Malaysia +0.22 -6.32 <.kl se>

Philippi +0.09 -7.89 <.ps nes i>

S.Korea 11>

Singapor -0.01 -1.53 <.st e i>

Taiwan +0.17 -7.53 <.tw ii>

Thailand +0.10 -5.40 <.se ti>

(Reporting by Archishma Iyer in Bengaluru; Editing by

Subhranshu Sahu)