Emerging markets - Most Asian FX, stocks muted; await inflation and central bank cues


JAKARTA (Reuters): Most Asian currencies drifted in a narrow range on Monday with the Thai baht and the Indonesian rupiah leading gains, while their equity peers slipped as investors awaited further clues on the outlook for inflation globally.

Market participants look forward to the US Personal Consumption Index and inflation data from Europe this week, which could prompt their respective central banks to ease their hawkish stances.

"The recent U.S. data have been mixed and until we see a string of stronger data, the dollar is likely to remain under pressure," Win Thin, global head of currency strategy at Brown Brothers Harriman said.

Data last week showed US business activity held steady in November, but employment in the private sector declined.

The dollar index took a breather during the day, standing at 103.31, down from 103.41 previously as at 0620 GMT.

Back in the region, Thailand baht and the Indonesian rupiah rose 0.4% and 0.3% each, leading the pack for the day, while the Singapore dollar and the Malaysian ringgit edged marginally higher.

Additionally, Taiwan's dollar ended about 0.2% higher, and is on track for its best month in a year.

"It’s been about positioning and catch up. The last two weeks have been about beta and USD position unwinding in the region, and we think it’s not yet about fundamental convictions," Natwest analysts wrote. "...TWD was the clearest example of long USD positioning being unwound."

Separately, South Korea and Thailand are set to announce their respective monetary policy decisions later this week, where both central banks are expected to stand pat on rates.

The South Korean and Thai currencies are presently the best performing emerging Asia units during the quarter, up more than 3% each.

The South Korean won has logged the highest gains for the month, up 2.7%, while the Philippines peso and Chinese yuan have risen more than 2%.

The MSCI International Emerging Market Currency Index has gained 2.3% in November, poised for its best month since the start of the year. Among Asian equities, stocks in Singapore, Taiwan and Thailand were down between 0.1% and 0.8% Markets in India were closed for a local holiday. - Reuters

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Emerging Markets , Asian FX , Struggling


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