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Asian Currencies Trim Losses as Firmer Yuan Counters Dollar

  • Regional currencies weaker as dollar firms
  • Nifty 50 hits lowest since Oct. 1
  • KOSPI closes at highest since Nov. 3

Nov 22 (Reuters) - Currencies in Asia's emerging markets remained weak on Monday, as growing anxiety over surging COVID-19 infections in Europe and hawkish comments from several U.S. central bankers weighed on sentiment, although a firmer yuan stabilized regional currencies.

The Thai baht fell 0.4%, while the Philippine peso and Indonesian rupiah fell 0.3% and 0.1%, respectively.

Federal Reserve officials Richard Clarida and Christopher Waller on Friday suggested that a faster pace of stimulus tapering may be appropriate, pushing the greenback higher, but strength in the yuan supported regional sentiment.

"The stronger USD price action this morning has eased with the renminbi strengthening again," said Alvin Tan, Head of Asia FX Strategy at RBC Capital Markets.

"The renminbi's resilience has indeed helped anchor the Asian currency complex in the face of the latest bout of USD strength."

Stocks in the broader region lacked direction, as return of COVID-19 restrictions in Europe put investors on guard.

"Fears of a fourth wave in Europe eroding the global recovery have played their part in Asia's cautious mood today," said Jeffrey Halley, senior market analyst for Asia Pacific at OANDA.

Shares in Seoul rose 1.4% to hit a near three-week high, as chip heavyweights in the country tracked their U.S. peers higher.

Meanwhile, customs agency data from South Korea showed the country's exports for the first 20 days of November jumped 27.6%, benefiting from a continued sales boost in semiconductor and petroleum products.

Stocks in China also rose, as analysts flagged chances of policy easing from the central bank's monetary policy report.

China's central bank on Friday said it would keep its prudent monetary policy "flexible and targeted" and strike a balance between economic growth and risk controls.

Indian shares dropped as much as 1.4% to hit an eight-week low, as market heavyweight Reliance Industries led energy stocks lower and as return of COVID-19 restrictions in Europe weighed on investor sentiment.

Shares in Jakarta fell 0.1%, retreating from the record high scaled on Friday.


** In South Korea, Samsung Electronics and peer SK Hynix rose 5.5% and 7.6%, respectively

** In India, Reliance Industries Ltd fell as much as 4.2%, their biggest one-day decline since Jan. 25

** Indonesian 10-year benchmark yields are up 1.3 basis points at 6.189%

Reporting by Harish Sridharan in Bengaluru; Editing by Shailesh Kuber

Source: Reuters

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