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Asian currencies decline as dollar firm on tapering expectations

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Emerging Asian currencies slipped on

Monday as the dollar strengthened ahead of U.S. inflation data

and as investors brace for the Federal Reserve to begin tapering

asset purchases, with the South Korean won leading the declines.

Stocks across the region were also subdued with main indexes

in Singapore and India off by 0.9% and 0.6%,

respectively.

Besides a raft of economic data from China this week,

investors are eyeing the print on U.S. consumer prices on

Tuesday, which is expected to show core inflation easing, while

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retail sales data on Thursday could show another decline.

U.S. CPI data will also be assessed in the light of

Philadelphia Fed President Patrick Harker’s recent comments to

Japanese daily Nikkei that he wanted to start tapering if the

spike in inflation proved more than transitory.

The dollar built on its bullish run from last week

and began the week stronger as investors bet on the Fed

beginning to tighten its purse strings even though cases of

coronavirus continue to rise.

“Asian markets may struggle to make any progress today amid

the various headwinds… For the week ahead, market focus will

be on U.S. CPI, and China’s data dump on Wednesday of August

data,” OCBC analysts said in a note.

The Indonesian rupiah and the Thai baht

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weakened around 0.2% and 0.3%, respectively, while the yuan

declined marginally.

Shares in China and Hong Kong fell on Monday, dragged by

stocks of tech giants, following a host of moves by Beijing to

crack down on the country’s technology sector.

Adding to such concerns was a media report that said the

government sought to break up Alipay, the hugely popular

payments app owned by Jack Ma’s Ant Group.

South Korean shares also dipped as worries about the Delta

variant weighed on sentiment. Meanwhile, its neighbor North

Korea test fired a long-range cruise missile over the weekend

raising concerns amongst many nations.

Singapore dollar and Philippine peso were

broadly steady.

China is due to release data on retail sales, industrial

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output and urban investment on Wednesday that analysts fear will

show a further slowdown in the world’s second biggest economy.

HIGHLIGHTS

** Indonesian 10-year benchmark yields are up 1 basis points

at 6.164%

** Top loser on the Singapore STI was Yangzijiang

Shipbuilding Holdings Ltd, down 3.11%

** Top losers on FTSE Bursa Malaysia Kl Index was

Top Glove Corporation Bhd, down 3.79%

Asia stock indexes and

currencies at 0212 GMT

COUNTRY FX FX FX INDEX STOCKS STOCKS YTD

RIC DAILY YTD % DAILY % %

%

Japan

China

India

Indonesia

Malaysia

Philippines

S.Korea

Singapore

Taiwan

Thailand

(Reporting by Indranil Sarkar in Bengaluru

Editing by Shri Navaratnam)

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