FX posts gains, stocks steady

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    Indonesia’s rupiah rose to a more than two-week high on Friday, taking heart from central bank assurances of its freedom from political influence and a decision to keep interest rates steady in aid of supporting the currency.

    Helped by a weaker dollar, the rupiah firmed 0.6 percent and local stocks also rose, putting both on course for weekly gains after two weeks of volatility driven by concerns about the economy and proposals to change the central bank law to hand government more say in policymaking.

    Other Asian currencies gained ground after downbeat US jobs data overnight and the Federal Reserve’s promise to keep interest rates at a record low weighed on the dollar.

    The South Korean won and the Taiwan dollar advanced about 1 percent each to lead gains in the region.

    The won outperformed to end the week over 2 percent firmer, its fastest weekly gain since early June, while the local bourse also rose 0.3 percent on foreign buying.

    Most Asian stock markets eked out modest gains after a day of major global central bank meetings where adequate monetary support was promised but without much details.

    Singapore, which is moving to try and reopen its economy even as coronavirus cases continue to emerge in migrant worker dormitories, was up just 0.3 percent on the week.

    Thai stocks were set to end higher for the first week in three, while the baht remained on course to appreciate for a second straight week, ahead of a central bank meeting on Wednesday.

    Thailand’s tourism- and export-reliant economy has been reeling from weakened demand amid the COVID-19 pandemic, though the recent removal of most virus restrictions has given markets some hope.

    “In my view, we have seen the worst of the capital outflows from Thailand,” said Nader Naeimi, head of dynamic markets at AMP Capital.

    “The most significant catalyst for foreign inflows from here is success in phase-three COVID vaccine trials,” he said, adding that conditions for an upturn in markets were in place.