The Thai baht firmed almost 1 percent on Friday, resuming trade after a three-day break, while most other emerging Asian currencies and share markets were largely mixed as investors took stock of economic data from the United States and China.
The Thai currency hit a two-week high after the dollar weakened, although it could face some pressure in the near term as new COVID-19 cases in Thailand see a record jump.
“Even if the US dollar remains sideways or slightly weaker, Thai baht could weaken further due to the worsening COVID-19 situation which is likely to lead to more stringent lockdown measures,” said Poon Panichpibool, markets strategist at Krung Thai Bank.
Thailand, along with Taiwan, also risks being labeled a currency manipulator as part of a foreign exchange report from US Treasury Secretary Janet Yellen expected this week.
In Russia, government bonds recouped some losses as investors considered news of US sanctions targeting the country’s sovereign debt. The rouble strengthened as much as a percent against the dollar after tumbling 1 percent on Thursday.
The Indian rupee firmed 0.6 percent and was set to appreciate slightly for the week, even as the country battles a massive second wave of the novel coronavirus.
“The second wave of COVID-19 is posing rising risks to the recovery. While our base case is that growth rebounds to 9 percent in FY22 from a slump of 6.4 percent in FY21, we see a 300 basis points downside risk to this forecast,” analysts at Bank of America said.
Many regional stock markets lagged global shares as upbeat US retail sales and manufacturing data, as well as record first-quarter economic growth in China were offset by worries over surging infections.
Equities in the Philippines, Malaysia and Indonesia slipped between 0.2 percent and 0.8 percent.
Indonesia’s rupiah firmed about 0.3 percent ahead of a central bank policy meeting next week, where Bank Indonesia is expected leave its key policy rate unchanged at a record low.
In Singapore, the dollar was off 0.2 percent but on track to firm about 0.5 percent for the week. Stocks scaled a more than one-week peak after the city-state’s non-oil domestic exports (NODX) expanded 12.1 percent in March.
