June 8, 2020 / 6:17 AM / a month ago

EM ASIA FX-Most Asian currencies gain on economic recovery hopes

    * BofA Research says Indonesian rupiah's rise
    * China's May exports better than expected 
    * India's central bank open to further easing - minutes 

    June 8 (Reuters) - Most emerging Asian currencies inched
higher against a softer dollar on Monday as an unexpected jump
in U.S. employment bolstered hopes for a swift global economic
recovery from a coronavirus-induced downturn.
    The promising data reduced safe-haven demand for the dollar
 ahead of the Federal Reserve's two-day policy meeting
ending on Wednesday while bolstering appetite for riskier assets
like equities and emerging-market currencies.
    South Korea's won and the Thai baht
strengthened about 0.4% each, while Taiwan's dollar
gained 0.2%.
    Several Asian countries have started easing virus-linked
restrictions in a phased manner to kick-start their economies
after weeks of lockdowns. 
    However, worries remain about whether this could lead to a
new wave of infections and restrictions. Indonesia and the
Philippines are two such examples, where curbs in some parts are
being eased but case loads are still rising. On Saturday,
Indonesia reported its biggest daily rise.

    "Given the still-elevated number of fresh daily infections
in both countries and the increased likelihood of a second wave
of infections, we expect both Indonesia and the Philippines to
see a delayed and shallow recovery with economies only returning
to form in early 2022," ING senior economist Nicholas Mapa wrote
in a note. 
    Indonesia's rupiah weakened 0.4% to 13,910 per
dollar, while the Philippine peso was flat.
    The onshore yuan edged 0.1% lower but traded
around its strongest level in nearly a month as exports fared
slightly better than expected in May.
    Market participants are also weighing the likelihood of an
escalation in tensions between Washington and Beijing as the
U.S. election approaches. 
    In India, another country gradually easing restrictions, the
rupee gained 0.1% to 75.540 a dollar. 
    Minutes of the Reserve Bank of India's meeting in May showed
the central bank was keeping the door open to further easing,
calling the pandemic's economic impact more severe than
initially anticipated.
    Markets in Malaysia were closed for a holiday. 
    The rupiah is coming off strong gains made last week which
returned the currency to pre-COVID-19 levels.
    The sharp rise in recent months, due to the central bank's
efforts to reassure investors attracted to Indonesia's
high-yielding bonds, has led BofA Global Research to say the
"exuberance in IDR is unsustainable". 
    "We believe that the Rupiah is getting much ahead of itself
in terms of Indonesia's macro picture and such outperformance of
IDR will not be sustainable," BofA Global Research said in a
 Currency    Latest bid  Previous day  Pct Move
 Japan yen   109.460     109.58        +0.11
 Sing dlr    1.394       1.3925        -0.09
 Taiwan dlr  29.731      29.839        +0.36
 Korean won  1204.800    1207.1        +0.19
 Baht        31.465      31.58         +0.37
 Peso        49.835      49.83         -0.01
 Rupiah      13910.000   13850         -0.43
 Rupee       75.540      75.58         +0.06
 Yuan        7.087       7.0812        -0.08
 Change so far in 2020                 
 Currency    Latest bid  End 2019      Pct Move
 Japan yen   109.460     108.61        -0.78
 Sing dlr    1.394       1.3444        -3.54
 Taiwan dlr  29.731      30.106        +1.26
 Korean won  1204.800    1156.40       -4.02
 Baht        31.465      29.91         -4.94
 Peso        49.835      50.65         +1.64
 Rupiah      13850.000   13880         +0.22
 Rupee       75.540      71.38         -5.51
 Ringgit     4.265       4.0890        -4.13
 Yuan        7.087       6.9632        -1.75
 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by
Subhranshu Sahu)
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