Most Asian FX decline, Thai baht bucks trend to hit 2-week high

Article content

The Thai baht firmed to an over two-week

high on Tuesday, kicking off the new year on a positive note, as

investors looked beyond clouds cast by the spreading Omicron

coronavirus variant, while most other Asian emerging currencies

weakened.

Notching a fourth straight session of gains, the baht

appreciated 0.3% to 33.26 per dollar, its highest since

late November.

The Thai currency’s strong start to 2022 comes after it

suffered its worst decline in two decade. The baht depreciated

Article content

11% last year as the pandemic hammered Thailand’s key tourism

sector.

Elsewhere, prospects of an early Federal Reserve interest

hike despite surging COVID-19 cases put Asian currencies on the

backfoot. .

The Philippine peso depreciated 0.4% to hit a more

than three-month low, while the Indonesian rupiah, the

Malaysian ringgit and the South Korean won

each weakened about 0.3%.

The U.S. dollar index, which measures the currency

against the yen and five other major peers, weakened slightly

but held close to the one-week high of 96.328 reached on Monday.

.

Overnight, all three major indexes on Wall Street finished

strongly, and the U.S. Treasury yields gained on expectations of

an earlier-than-expected rate hike as inflation fears outweighed

Article content

the rising COVID-19 cases.

“Markets seem to have retained memories of 2021 and put

Omicron in the backdrop with focus on Fed rate hikes leading to

higher U.S. Treasury yields and underpinning U.S. dollar

strength alongside continued buoyancy in equities,” analysts at

Mizuho Bank said in a note.

Poon Panichpibool, markets strategist at Krung Thai Bank

said the ongoing impact of the Omicron variant and likely

tightening by the Fed could prevent any sharp appreciation by

the baht.

He expected the Thai currency to hold in a range between

32.75 and 33.50 per dollar before strengthening by the end of

2022.

“For the second half, an improving economic recovery in

Thailand and elsewhere should support more fund flows into

Article content

emerging markets and Thailand. Along with that, a low current

account deficit could help the baht reach between 31.75 and

32.00 by the end of this year,” Panichpibool added.

Elsewhere, China’s yuan slipped as much as 0.4%

to 6.3695 per dollar on its first trading day of the year, while

Japan’s yen weakened 0.4% to hit its lowest level since

early 2017 after declining for a fifth straight session.

Shares in Singapore, Thailand and Indonesia

advanced between 0.5% and 1.2%, while Malaysian equities

declined up to 0.8% on their second day in the red.

Meanwhile, the Philippine stock exchange suffered an

unexplained delay in opening. It said it would issue a statement

later.

HIGHLIGHTS:

** Indonesian 10-year benchmark yields rises to 6.391%

Article content

** China to require certain firms to undergo cybersecurity

reviews before pursuing overseas listings

** Oil prices steady ahead of OPEC+ output policy meeting

** India reports most COVID-19 cases since early September

Asia stock indexes and

currencies at 0352 GMT

COUNTRY FX FX FX INDEX STOCKS STOCKS

RIC DAILY YTD % DAILY YTD %

% %

Japan -0.37 -0.58 1.38 1.38

China

India 0.00 +0.09 0.00 1.57

Indonesia -0.25 -0.35 0.51 1.79

Malaysia -0.22 -0.38 -0.75 0.00

Philippin -0.41 -0.51 – -1.14%

es

S.Korea

Singapore -0.07 -0.40 1.20 1.54

Taiwan +0.13 +0.29 0.99 1.28

Thailand +0.27 +0.27 0.58 0.58

(Reporting by Sameer Manekar in Bengaluru)