Rupiah leads Asia FX gainers

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    The Indonesian rupiah hit its highest levels in more than 18 months after the country’s central bank said it will allow the currency to strength and as most Asian currencies rose on easing US-Iran tensions.

    The rally set the rupiah, Korean won and other currencies for a close well off lows hit earlier this week, when investors rushed into the safety of the Japanese yen and gold following missile attacks from Iran targeting US forces in Iraq.

    “Markets are a bit more energized as the Middle East tensions have not aggravated over the past day or so. The investors are back in favor of riskier assets,” said Chang Wei Liang of DBS Bank.

    Oil prices extended losses in a sigh of relief for net importers.

    The Indonesian rupiah led the gainers, firming as much as 0.7 percent to its strongest level since April 2018.

    The Indian rupee gained 0.2 percent to strike its firmest point in three weeks and was set to gain about a percent for the week.

    The Malaysian ringgit strengthened 0.3 percent, aided by strong domestic data.

    Malaysia’s industrial production rose 2 percent in November from a year earlier, recovering from its slowest growth pace in six years the previous month, government data showed on Friday.

    The Thai baht, the Singapore dollar and the Taiwan dollar firmed about 1 percent each.
    China’s yuan was steady but hovered around five-month highs and was on track for its third straight weekly gain ahead of the much-anticipated signing of the Phase 1 trade deal between the United States and China.

    Meanwhile, the Korean won weakened as much as 0.4 percent after rising about a percent in the previous session. The currency, however, is set to post its first weekly gain in three.

    The rupiah’s strongest level during the session also marked the unit’s biggest intraday percentage gain in more than four months and the currency is set to gain about 1.3 percent for the week, its best weekly performance in a year.

    A senior official of Bank Indonesia official told Reuters that it was not targeting any level for rupiah appreciation and also confirmed a media report that the central bank would allow the rupiah to strengthen in line with fundamentals. – Reuters