Asian currencies gain on weaker dollar, China shares rebound

0
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Reuters


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Most emerging Asian currencies

strengthened on Thursday against a weaker dollar, which was

weighed down by the U.S Federal Reserve’s signal that rate hikes

and stimulus tapering aren’t on the radar in the near future.

Fed Chair Jerome Powell in a news conference overnight took

a dovish stance, saying that the U.S job market still had “some

ground to cover” before it would be time to pull back emergency

economic support measures.

“Today’s gains in regional (South-east Asia) currencies are

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probably due to the dovish Fed, and the report saying China’s

Securities and Regulatory Commission (CSRC) held a meeting with

major investment banks,” said Gao Qim FX Strategist (EM Asia) at

Scotiabank.

Sources said China’s securities regulator held a virtual

meeting on Wednesday night with executives of top global

investment banks seeking to calm financial markets after a

massive sell-off in Chinese shares this week. The news aided

risk sentiment locally and in the broader South-east Asia

region.

A media report https://www.cnbc.com/2021/07/29/china-to-still-allow-ipos-in-the-us-securities-regulator-csrc-says.html

also revealed that the Chinese government will continue to

allow companies to conduct initial public offerings (IPOs) in

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the United States, provided they adhere to listing requirements.

The yuan was up 0.2%, while the South Korean won

added as much as 0.9% and led gains among currencies

in the region.

“Some signs of reassurance from Chinese authorities, on

regulatory drags likely being contained to certain sectors (as

opposed to spillovers to more industries), likely lent some

support to yuan and AxJ FX sentiments as well,” Maybank analysts

said in a note.

Equities in China also took a breather, gaining as

much as 1.4% and rebounding from a rampant sell-off over the

past few days.

Meanwhile, Thailand posted yet another daily record of new

coronavirus infections cases and fatalities, while neighboring

Malaysia on Wednesday reported 17,405 coronavirus cases, also a

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new daily record.

Stocks in Kuala Lumpur were up 0.3%, while Thailand

shares dropped after returning to trading from a holiday

on Wednesday.

Equities in Taiwan added as much as 1%, their

biggest jump in one-week ahead of the country’s second quarter

gross domestic product data expected on Friday.

A survey conducted by Reuters showed that the country’s

economy is expected to have expanded at a slower pace in the

second quarter as a rare spike in COVID-19 cases hurt

consumption.

Highlights

** Indonesian 10-year benchmark yields are up 1 basis points

at 6.319%

** Bright Led Electronic Corp up 10% and top

gainer on the Taiwan SE Weighted Index

** China shares up as much as 1.4%, biggest jump since May

25

Asia stock indexes and currencies at

0359 GMT

COUNTRY FX RIC FX FX INDEX STOCKS STOCK

DAILY YTD % DAILY S YTD

% % %

Japan +0.12 -5.95 0.64 1.15

China +0.23 +0.82 1.04 -2.20

India +0.00 -1.76 0.34 12.74

Indonesia +0.00 -3.07 0.51 2.35

Malaysia +0.25 -4.75 0.16 -6.72

Philippines -0.22 -4.61 0.66 -8.74

S.Korea +0.81 -5.16 0.05 12.70

Singapore +0.08 -2.50 0.48 11.00

Taiwan +0.23 +1.94 1.03 17.51

Thailand +0.33 -8.80 -0.12 5.96

(Reporting by Harish Sridharan in Bengaluru; Editing by Kim

Coghill)

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