Most Asian currencies rise on easing of some COVID curbs in China

Most Asian emerging currencies rose on Monday, with the Chinese yuan and Vietnam's dong leading gains, as a softer U.S. dollar and signs of China easing its strict zero-COVID strategy supported investors' appetite for riskier assets.

The yuan USDCNY appreciated 1.4% against the dollar, hitting its highest since Sept. 15 as the dollar index DXY fell 0.3% at 104.17. Stocks in Shanghai 000001 advanced more than 1%.

Steps taken in some Chinese cities to ease coronavirus curbs raised hopes of increased demand for commodities in Southeast Asia's biggest trading partner.

"China remains a dominant driver, and the good news has been rolling in – through the weekend we've heard more news with Shanghai and Hangzhou easing restrictions, with PCR tests no longer needed to visit certain public venues," said Chris Weston, head of research at broker Pepperstone.

Analysts at OCBC expect a changing U.S. Federal Reserve policy and China reopening to result in a rebalancing of portfolio flows to Asia, "especially when allocations in Asia may have been lower than usual amid the sell-off seen in most parts of 2022".

The Vietnamese dong USDVND strengthened 1.9% and posted its best session since September 2010 on flows from foreign borrowings by Vietnam Technological And Commercial Joint Stock Bank TCB and Masan Group MSN, according to a market source.

South Korea's won USDKRW firmed 0.7%, while Singapore's dollar USDSGD advanced 0.5% to hit its highest since February 23.

Malaysia's ringgit USDMYR, which has lost 4.6% so far this year, appreciated 0.5% to hit its highest level since May 6. Since last week, the currency has drawn support from the appointment of Anwar Ibrahim as prime minister.

Anwar, who will also serve as Malaysia's finance minister, announced new cabinet appointments on Friday. Markets now await a revised 2023 budget before the year end.

"The unveiling of the new cabinet 'relatively' quickly helped removed some political uncertainty," analysts at Maybank wrote in a note.

Elsewhere, the Philippines lowered its growth target for 2023 to 6.0%-7.0%, from 6.5%-8.0% and revised its foreign exchange rate assumptions for 2022-2024.

The peso USDPHP depreciated 0.1%, while stocks in Manila PPSEI rose 0.5%.

Among stock markets, China's benchmark index (SSEC) led gains as it surged 1.6%. Equities in Kuala Lumpur BURSA and Seoul KOSPI declined 0.6% and 0.7%, respectively.

Markets in Thailand were closed on account of a public holiday.

HIGHLIGHTS:

** China c.bank extends bilateral currency swap agreement with Macau for three years

** Indonesia c.bank says digital rupiah currency can be used in metaverse

The following table shows rates for Asian currencies against the dollar at 0434 GMT.