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EM ASIA FX-Asian currencies thrive as downbeat U.S. jobs data hurts dollar
June 5, 2017 / 7:06 AM / 6 months ago

EM ASIA FX-Asian currencies thrive as downbeat U.S. jobs data hurts dollar

    * Peso, ringgit rise on strong equities
    * Yuan up on services PMI, strongest midpoint in many months
    * Baht gains ahead of central bank's news conference

 (Adds text, updates prices)
    By Patturaja  Murugaboopathy 
    June 5 (Reuters) - Asian currencies were broadly firmer as
the dollar languished near a seven-month low on Monday after
disappointing U.S. jobs growth in May raised doubts over the
number of Federal Reserve interest rate hikes this year.
    The dollar index hit its lowest level since the
November presidential election, after U.S. nonfarm payrolls
sharply undershot a Reuters' poll forecast.
    While many analysts are certain about a rate hike this
month, they expect a more dovish course for the second half of
this year.
    "Doubts about the Fed's conviction about tightening
trajectory were triggered by NFP (nonfarm payrolls)
disappointment, triggering UST yield slump and softer USD,"
Vishnu Varathan, head of economics and strategy at Mizuho Bank's
Treasury, said in a research note.
    Strong equities and foreign inflows propelled the Philippine
peso and the Malaysian ringgit to a more than
quarter percent rise for each. Foreign investors have been net
buyers in Malaysian stocks for 17 consecutive weeks, while they
were net buyers in Philippine stocks on each trading day of the
last week.
    Malaysia's fifth-straight month of double-digit growth in
exports also pushed the ringgit to its highest since Nov. 10.

    The People's Bank of China's (PBOC) firmer setting of the
midpoint rate in nearly 7 months and a strong
services sector activity survey contributed to the yuan's
rise on the day.
    The PBOC took markets by surprise last week when it
announced it would add an as-yet undefined "counter-cyclical"
factor to its daily reference point calculations to overcome
depreciation expectations.
    The Thai baht was the top performer of the day with
more than a half percent rise, ahead of a central bank news
conference on foreing exchange regulation reforms on Monday.

    This week marks three major global events - UK national
elections, a policy meeting of the European Central Bank, and
former FBI Director James Comey's testimony to the Senate.
Analysts expect these events to bring some risks to the region.
    "If the election impacts global market sentiment, it will
move Asian markets. Asian currencies could shed in response to
headlines," said Gao Qi, an FX Strategist at Scotiabank.  
    However the effects could be favourable for the regional
currencies, if the ECB continues with its dovish tone on
Thursday, analysts said.
    "We expect (ECB chief Mario) Draghi to underscore that it is
too early to pare back monetary accommodation, and thus capital
inflows to AXJ markets could sustain, buoying AXJ currencies"
said Varathan of Mizuho Bank.
    The Thai baht edged up 0.63 percent to 34.045 per
    The rise comes ahead of its news conference on foreign
exchange regulation reforms on Monday, as policymakers remain
focused on tamping down on a strong baht.
    Central bank governor Veerathai Santiprabhob told reporters
last week the reforms will bolster rules to manage both fund
inflows and outflows.  
    However, some analysts said it would be difficult to curb
the baht's appreciation.
    "Though the desire for a weaker THB is palpable, engineering
it is challenging in the face of high current account
surpluses", ANZ said in a report. 
    The baht has appreciated more than 5 percent against the
dollar this year.
    The Indian rupee edged up 0.13 percent to 64.353
per dollar, its highest since May 17.
    The central bank is reviewing its policy rate on Wednesday,
and most analysts expect it to remain unchanged.
    However, they expect a dovish tone as GDP growth
slumped to its lowest in more than two years in the March
    "Soft 1Q17 GDP numbers and below-target Jan-Apr inflation
are at odds with the Reserve Bank of India policy committee's
neutral policy stance. This has fuelled expectations for a
return to the accommodative stance and re-opening the door for
rate cuts," DBS bank said in a report.
  Change on the                                             
 day at   0605                                  
  Currency           Latest bid   Previous day      Pct Move
  Japan yen      110.580                 110.4         -0.16
  Sing dlr       1.381                  1.3804         -0.07
  Taiwan dlr     30.083                 30.127         +0.15
  Korean won     1118.100               1121.8         +0.33
  Baht           34.045                 34.259         +0.63
  Peso           49.420                  49.55         +0.26
  Rupiah         13287.000               13303         +0.12
  Rupee          64.335                  64.44         +0.16
  Ringgit        4.265                   4.279         +0.33
  Yuan           6.804                  6.8085         +0.07
  Change so far                                             
 in 2017                                        
  Currency       Latest bid      End 2016           Pct Move
  Japan yen      110.580                117.07         +5.87
  Sing dlr       1.381                  1.4490         +4.90
  Taiwan dlr     30.083                 32.279         +7.30
  Korean won     1118.100              1207.70         +8.01
  Baht           34.045                  35.80         +5.15
  Peso           49.420                  49.72         +0.61
  Rupiah         13287.000               13470         +1.38
  Rupee          64.335                  67.92         +5.57
  Ringgit        4.265                  4.4845         +5.15
  Yuan           6.804                  6.9467         +2.10

 (Reporting by Patturaja Murugaboopathy in Bengaluru; Editing by
Jacqueline Wong)

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