*
Taiwan dollar, Chinese yuan top gainers
*
Thai baht lingers at over 10-month high
*
Fed expected to hike rates by 25 bps
By Upasana Singh Jan 30 (Reuters) - Most Asian currencies advanced on Monday as China's markets resumed trade after a week-long Lunar New Year break, while investors looked towards key central bank events this week, including an interest rate decision by the U.S. Federal Reserve. The Chinese yuan appreciated 0.6% to hit a near two-week high, while the Taiwan dollar rose 0.7% to its highest level since August 23 last year.
Thailand's baht , which is among the year's best performing currencies in the region, firmed 0.2%. It has been hovering at a more than 10-month high.
Malaysia's ringgit strengthened 0.1% and was lingering at its highest since last April. South Korea's won rose 0.2%. "Given the outlook on modest Fed hikes, we see some potentially stronger currency movements this week against the greenback, helped by the positive outlook on China," analysts at MUFG Bank said in a note.
The Fed is widely expected to hike rates by 25 basis points (bps) on Wednesday. Market participants will be watching out for guidance on the central bank's future policy decisions as U.S. inflation cools from decades-high levels. "Fed Chair Powell is still likely to push back on market speculation of second-half 2023 rate cuts and emphasise the need to keep going until there are clearer signs of inflation softening further," analysts at OCBC said in a note.
Most central banks in Southeast Asia are dialling back their policy tightening, with Malaysia's central bank unexpectedly pausing, Indonesia signalling an early end to its cycle and Bank of Thailand hinting at measured tightening ahead. The Reserve Bank of India is the latest that is expected to pause its hiking cycle after a modest rise of 25 bps at its meeting one week after New Delhi's Feb. 1 budget, a Reuters poll showed. Domestic Lunar holiday trips in China surged 74% from last year after authorities scrapped COVID-19 travel curbs, signalling better economic activity in Southeast Asia's biggest trading partner than in 2022.
Stock markets across the region were trading in negative
territory, with Indonesia equities falling 0.5% and
Philippine stocks declining 1.3%. China's benchmark index and Taiwan were the only bright spots in the
region, gaining 0.7% and 3.1%, respectively.
HIGHLIGHTS:
** U.S. secures deal with Netherlands, Japan to curb exports
of some advanced chip-making machinery to China - Bloomberg
reports
** Indian equities are expected to open higher on Monday
after falling in the previous two sessions following a
short-seller attack on Adani group companies Here are rates of Asian currencies against the dollar at
0353 GMT:
Asia stock indexes and currencies at
0352 GMT
COUNTRY FX RIC FX FX INDE STOCKS STOCKS
DAILY % YTD % X DAILY YTD %
%
Japan -0.12 +0.85 <.N2 0.25 5.20
25>
China <CNY=CFXS +0.62 +2.17 <.SS 0.72 6.45
> EC>
India -0.18 +1.29 <.NS -0.35 -3.11
EI>
Indonesi -0.02 +3.88 <.JK -0.53 0.17
a SE>
Malaysia +0.14 +3.90 <.KL 0.00 0.14
SE>
Philippi -0.09 +2.09 <.PS -1.32 5.98
nes I>
S.Korea <KRW=KFTC +0.17 +2.87 <.KS -1.27 9.66
> 11>
Singapor -0.06 +2.01 <.ST -0.22 4.16
e I>
Taiwan +0.65 +1.78 <.TW 3.08 8.88
II>
Thailand +0.20 +5.55 <.SE -0.05 0.71
TI>
(Reporting by Upasana Singh in Bengaluru; Editing by Clarence
Fernandez)
