Asian FX range-bound; Indian rupee rises on JPMorgan index inclusion

EMERGING Asian stock markets rose on Friday, while most currencies traded in a narrow range as investors digested the prospects of higher-for-longer U.S. interest rates.

In India, the rupee appreciated 0.2%, while equities rose 0.1%. Bonds rallied after JPMorgan said it would include Indian debt to its widely tracked emerging market debt index, setting the stage for billions of dollars of inflows into the world's fifth-largest economy.

"Expect this JPMorgan index announcement to spark more interest in the rupee," analysts at ING said in a note.

Equities in Shanghai jumped 1.4% to lead gains. Shares in Manila, Bangkok and Jakarta climbed between 0.5% and 0.7%.

The Thai baht was the biggest mover among regional currencies this week, easing 0.1% and on track for a 1% weekly drop on the back of high oil prices and concerns about the government's spending plans.

Risk sentiment also dipped this week in the wake of the U.S. Federal Reserve's hawkish monetary policy stance.

Investors will now turn their focus to the Bank of Thailand's (BoT) policy decision next week.

"We think the BoT will put in a final 25bp (basis points) hike in anticipation of a pick-up in inflation and growth in 2024 as well as considering its desire to discourage excessive leverage," analysts at ANZ said in a note.

Among other regional currencies, the South Korean won strengthened 0.2%, although the currency was set for a 0.8% weekly decline.

Indonesia's rupiah dipped 0.1%. The Singapore dollar, the Philippine peso and Malaysia's ringgit rose 0.1% each.

Separately, the Bank of Japan kept ultra-low interest rates and its dovish guidance on future monetary policy.

The yen slipped 0.4% after the announcement and was last down 0.5%.


** Thailand's new Prime Minister Srettha Thavisin met with U.S. companies including Microsoft, Google, and Estee Lauder in his first trip abroad since coming to power last month, looking to draw investment to boost a flagging economy

** Citi sees India's 10-year bond yield dropping to 6.80% post index inclusion - Reuters

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Asian , currencies , interest rates


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