June 5, 2020 / 6:02 AM / a month ago

EM ASIA FX-Asian currencies set for weekly gains as ECB stimulus boosts risk appetite

    * Indonesian rupiah at over 3-month high
    * Philippine peso gains; inflation slows for fourth straight
month
    * Thai baht at over 2-month high 

 (Adds text, updates prices)
    By Shriya Ramakrishnan
    June 5 (Reuters) - Asian currencies strengthened on Friday
and were on course for weekly gains as a bigger-than-expected
stimulus package by the European Central Bank helped keep the
greenback under pressure and support appetite for riskier
assets.
    The U.S. dollar hovered near a three-month low against a
basket of currencies after the ECB increased its emergency bond
purchase scheme by 600 billion euros to 1.35 trillion euros and
extended the scheme to mid-2021.
    Risk sentiment has largely remained intact this week as the
reopening of several global economies has supported economic
recovery hopes and helped investors look beyond simmering
Sino-U.S. tensions and civil unrest across the United States.
    "Buy equities and sell the USD was the dominating theme
again this week, and momentum doesn't appear to be fading. There
is an obvious disconnect between asset values and current
economics but those who have dwelt on the disparity have missed
the rally," an ANZ note said.
    The South Korean won advanced 0.6%, in tandem
with gains in local equities, while the Chinese yuan
 rose 0.3% in onshore trade.
    Leading gains in the region, the Indonesian rupiah
strengthened 1% to 13,935 against the greenback, its highest
level in more than three months.  
    Recent weakness in the greenback has largely prompted
investors to pile back in to the country's debt market as
Indonesian debt offers the highest yield in Southeast Asia. The
currency was on track to record a weekly gain of 5%, its best
week since late 2015.
    Investors were also soothed by easing of some
coronavirus-induced curbs in the Indonesian capital city of
Jakarta.
    Export-focused units such as the Singapore dollar and
Taiwan dollar firmed 0.3% and 0.4%, respectively.
    The Thai baht rose 0.4% to 31.47 per dollar.
    Markets await further steps by the Bank of Thailand to curb
a rapid rise in the currency, after it conducted a meeting with
exporters and foreign exchange traders on Thursday.
    The Indian rupee and Malaysian ringgit
rose 0.2% each, while the Philippine peso erased early
losses to trade 0.2% higher.
    Philippine inflation eased for a fourth straight month in
May, as the country's coronavirus lockdown measures tempered
price pressures on food and fuel.
    Analysts at Goldman Sachs expect the Philippine central bank
to cut policy rates by 25 basis points in the third quarter to
support an economy facing below-target inflation and a likely
contraction in growth this year. 
    
    CURRENCIES VS U.S. DOLLAR
  Change on the day at                              
        0524 GMT                              
  Currency                  Latest  Previous     Pct
                               bid       day    Move
  Japan yen              109.130      109.13   +0.00
  Sing dlr               1.393        1.3980   +0.34
  Taiwan dlr             29.823       29.926   +0.35
  Korean won             1211.000     1218.7   +0.64
  Baht                   31.470        31.59   +0.38
  Peso                   49.820         49.9   +0.16
  Rupiah                 13835.000     14060   +1.63
  Rupee                  75.398        75.58   +0.24
  Ringgit                4.262          4.27   +0.19
  Yuan                   7.095        7.1130   +0.25
                                                    
  Change so far in 2020                             
  Currency               Latest     End 2019     Pct
                         bid                    Move
  Japan yen              109.130      108.61   -0.48
  Sing dlr               1.393        1.3444   -3.50
  Taiwan dlr             29.823       30.106   +0.95
  Korean won             1211.000    1156.40   -4.51
  Baht                   31.470        29.91   -4.96
  Peso                   49.820        50.65   +1.67
  Rupiah                 13835.000     13880   +0.33
  Rupee                  75.398        71.38   -5.33
  Ringgit                4.262        4.0890   -4.06
  Yuan                   7.095        6.9632   -1.86
 

 (Reporting by Shriya Ramakrishnan in Bengaluru; Editing by
Rashmi Aich)
  
 
 
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