EMERGING MARKETS-Philippine peso, Thai baht fall among mixed Asian currencies

By Sameer Manekar Sept 1 (Reuters) – The Philippine peso and the Thai baht weakened over half a percent each on Wednesday, leading declines among largely mixed Asian currencies as a slew of soft regional economic data as well as from the United States and China weighed on the sentiment.

The Philippine peso slipped as much as 0.8% to 50.03 per dollar after data showed manufacturing activity contracted in August as compared with last month, while the Thai baht slipped from a near two-month high scaled in the previous session.

A raft of IHS Markit data showed factory activity in Asia lost momentum in August due to a resurgence in coronavirus cases, with China – the region’s biggest trading partner – logging a contraction for the first time since April last year.

The peso marked its worst intraday drop in nearly four weeks, while equities in Manila declined more than a percent as the daily coronavirus cases in the country touched a record high earlier in the week.

“With COVID risks intact, recovery in the Philippine peso could be choppy, particularly against regional peers,” analysts at Maybank said in a note. “On a forward-looking note though, regional economies such as Indonesia, Thailand and Malaysia have begun easing curbs alongside stabilization/decline in their COVID case trajectories and this could hint at more benign outturns ahead.”

Among other Asian currencies, the Malaysian ringgit, South Korean won, and the Taiwanese dollar were the top gainers, appreciating as much as 0.3% as the U.S. dollar remained pinned near its three-week lows. The U.S. dollar index, which measures the greenback against a basket of currencies, traded at 92.744 as of 0310 GMT as investors awaited a key jobs report due on Friday for clues on the Federal Reserve’s tapering timeline.

A weaker August non-farm payroll number could solidify the case for the Fed prolonging its dovish stance, adding further pressure on the U.S. dollar. “A much stronger than expected labour market report could reignite expectations of faster Fed normalisation, providing support for the dollar,” analysts at Maybank said.

Among equities, shares in Malaysia were the top loser at 0.5% even as the government said its 2022 budget will prioritise economic recovery. However, it is expecting the fiscal deficit to widen to between 6.5% to 7% of gross domestic product in 2021.

Singapore shares advanced more than 1% after losing 1.5% on Tuesday, while equities in Seoul put on 0.5% in their fourth straight session of gains. 

Source: https://www.reuters.com/article/emerging-markets-asia/emerging-markets-philippine-peso-thai-baht-fall-among-mixed-asian-currencies-idUSL1N2Q307O?rpc=401&