* Malaysian ringgit eyes best day in 5-weeks * Dollar held off 10-month high * Asian stocks largely trading higher By Roushni Nair Sept 29 (Reuters) – Asian currencies rose on Friday in holiday-thinned trading, with the Malaysian ringgit leading the gainers in what has been a challenging week for regional currencies after hawkish U.S. Fed rhetoric and surging oil prices boosted the dollar. The ringgit appreciated by 0.4% as of 0350 GMT, poised for its best session since August. It, however, has been logging losses for three straight quarters. The Indonesian rupiah and Indian rupee followed suit, strengthening by 0.1% each. The rupiah, though, is on track for its worst quarterly performance since June last year, losing more than 3% in value. The U.S. dollar index, which tracks the currency against six other majors, was largely flat. However, it is on track for an 11th straight week of gains on expectations that the U.S. economy would remain more resilient to higher interest rates and a surge in oil prices. “The speed of the move has led to weaker currencies within the region, a violent sell-off in local rates, and wider EM credit spreads. However, the repercussions in different asset classes have had varied implications,” analysts at Barclays said in a note. Markets in Taiwan, China, and South Korea were closed on account of a public holiday. Asian markets now await key data points in the week ahead, including the Reserve Bank of India’s monetary policy meeting on Oct. 6, and inflation numbers from Indonesia, the Philippines, and South Korea. Surging fuel prices that touched new highs this week have stoked concerns about a higher import bill and persistent inflationary pressures in net oil importers such as Thailand and India. Barclays noted the spreads versus U.S. ones are still tight in a world that is adjusting to “higher rates for longer,” and higher oil could pressure EM headline inflation higher before it hits consumption. “While terminals now look high to us, we think it may take some time to correct and it is not clear that the move is even over. For the time being, focus should be on spreads between EM and US rates and not on how far emerging markets are from their own neutral rates,” the note added. Among other Asian currencies, the Thai baht depreciated by 0.1% and is on track to log its fourth straight week of losses. The currency, however, has regained some lost ground after touching 10-month lows through the week. The baht has lost over 3% in value this quarter. Depreciation in the Thai currency is underpinned by concerns over a widening fiscal deficit due to higher spending by the country’s new government, which took office last month and is advancing fresh policies to stimulate the economy. Shares in Southeast Asia were largely trading higher, with those in Singapore advancing 0.5%, while stocks in Indonesia and India surged over 3%. Shares in the Philippines lost about 0.4%. HIGHLIGHTS: ** Indonesian 10-year benchmark yield touches highest since late March at 6.91% ** Thai c.bank chief says rates pause appropriate ‘for now’ after surprise hike ** Indonesia’s July palm oil exports at 3.52 mln tonnes -association Asia stock indexes and currencies at 0450 GMT COUNTRY FX RIC FX FX INDEX STOCKS STOCKS DAILY % YTD % DAILY YTD % % Japan -0.03 -12.2 -0.26 23.61 1 China India +0.10 -0.46 0.41 8.27 Indonesi +0.13 +0.45 0.34 1.62 a Malaysia +0.41 -6.12 -0.78 -4.45 Philippi +0.00 -1.80 -0.43 -3.17 nes S.Korea Singapor +0.11 -1.80 0.51 -0.86 e Taiwan – -4.83 – 15.67 Thailand -0.14 -5.45 -0.23 -11.38 (Reporting by Roushni Nair in Bengaluru; Editing by Muralikumar Anantharaman)
