(Updates for afternoon trade) * Asian FX rallies on Fed rate-cut bets, weak dollar * Taiwan dollar, Korean won lead Asian FX higher * Regional stocks climb, led by Manila, Taipei By Roushni Nair Sept 5 (Reuters) – Asian currencies strengthened against the U.S. dollar on Friday as traders positioned for a Federal Reserve rate cut this month, while equities posted broad gains following Wall Street’s overnight rally to record highs. The South Korean won strengthened 0.35% and Taiwan’s dollar climbed 0.49%, leading regional currencies. Taiwan’s benchmark stock index rose 1.3%, extending its winning streak as technology stocks rallied. In Thailand, the parliament was set to choose a new prime minister after a court’s dismissal of Paetongtarn Shinawatra from the post. The baht gained 0.25% against the greenback, while stocks in Bangkok advanced 0.99% as markets looked beyond the political uncertainty. Trade, however, remained subdued with Malaysia and Indonesia observing public holidays. Markets have all but priced in a quarter-point Fed rate cut at next week’s policy meeting, with traders expecting 60 basis points of reductions by year-end. The dollar index fell 0.2% to 98.11 as traders awaited U.S. jobs data later in the day. The Fed meets on September 16 and 17. “We anticipate the Federal Reserve will ease policy over the coming months, providing room for Asian central banks to cut rates to support growth amid trade headwinds,” MUFG’s forex strategist Lloyd Chan said. “Against a backdrop of a weaker U.S. dollar, we favour the yen, rupiah, and ringgit.” On Thursday, the Bank Negara Malaysia left its overnight policy rate unchanged at 2.75% as expected. Expectations of an easier monetary environment have supported global equities. The S&P 500 rose 0.8% to finish at a record high on Thursday. Most regional stock markets rose, with the Philippines’ index climbing 0.69% and Singapore’s Straits Times adding 0.38%. Japan’s Nikkei gained 0.19%, while India’s Nifty declined 0.43%. The MSCI gauge of emerging market currencies was little changed this week, while a gauge of emerging Asian equities advanced more than 1%, on track for its best week since August 11. Though Indonesian markets had some respite this week, they could face headwinds again as deadly protests over lawmakers’ bonuses escalated after police killed a motorcycle taxi driver during demonstrations. Rights groups have reported 10 deaths and over 1,000 injuries in clashes with security forces. The rupiah gained 0.4% over four sessions on broad dollar weakness after losing more than 1% due to the protests last week. Jakarta stocks rose 0.5% this week, after losing 0.4% in the previous week. HIGHLIGHTS: ** Indonesia to discuss fuel supply issue with private distributors ** China’s central bank to inject 1 trillion yuan Asian currenc ies and stocks as of 0749 GMT Japan +0.18 +6.0 <.n2> 0.63 9.44 China 7 EC> India -0.22 -3.0 <.ns ei=””> Indones +0.00 -1.9 <.jk ia=”” se=””> Malaysi +0.00 +5.8 <.kl a=”” se=””> Philipp +0.45 +2.1 <.ps i=”” ines=””> S.Korea 9 11> Singapo +0.24 +6.1 <.st i=”” re=””> Taiwan +0.31 +7.0 <.tw ii=””> Thailan +0.30 +6.5 <.se d=”” ti=””> (Reporting by Roushni Nair in Bengaluru; Editing by Edwina Gibbs) .ps> .n2>
