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Asian currencies edged lower after

investors flocked to the dollar on Tuesday, while markets

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weighed the implications of the U.S. debt ceiling deal and

expectations of weak data from China’s industrial sector dented

risk appetite.

The Philippine peso and the Thai baht eased

0.6% and 0.4%, respectively, while equities in the regions each

dipped 0.9% and 0.2%.

China will release official manufacturing PMI data on

Wednesday. A Reuters poll found factory activity likely

contracted further in May, highlighting the stuttering recovery

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of the world’s second-biggest economy from the pandemic.

“With optimism around China’s reopening growth momentum

fading, the potential spillovers into various other economies,

whether through price or volumes, is being questioned again,”

analysts at Barclays said in a note.

The Chinese yuan eased 0.4%, while benchmarks in

Shanghai and Hong Kong fell 0.3% and 2%,

respectively.

A deal to lift the United States’ $31.4 trillion debt limit

announced by the White House and House Republicans late Saturday

would avert a catastrophic U.S. default, but some investors are

wary that proposed spending cuts could weigh on growth.

“The new fiscal limits could be something the Fed will need

to consider at the upcoming June policy meeting as well,”

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Maybank analysts said.

The tentative deal faces a rocky path ahead as a handful of

hard-right Republican lawmakers on Monday said they would oppose

it.

Elsewhere in emerging markets, Turkey’s lira hit

a fresh record low of 20.2 against the dollar, extending its

losses after President Tayyip Erdogan won Sunday’s presidential

election runoff to maintain his rule into a third decade.

Stocks in Seoul rose nearly 1% after the finance

ministry said it would cut tariffs from June on higher-priced

edible products, including pork and sugar, to help ease living

costs.

For the week ahead, investors are keenly awaiting India’s

GDP data, Thailand’s trade data and interest rate decision due

later this week.

India’s economy is expected to grow about 6% this fiscal

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year, with a small increase in private investment, according to

a Reuters poll of economists, who said lower growth and high

inflation were the biggest risks to the outlook.

HIGHLIGHTS:

** Kenya’s central bank holds main lending rate at 9.50%

** South Africa’s central bank flags risks of capital

outflows and sanctions

** India RBI chief flags governance gaps, stressed

assets misreporting at some banks

** Japan’s jobless rate falls to 2.6% in April

Asian

currenci

es and

stocks

at 0619

GMT

COUNTRY FX RIC FX FX INDE STOCKS STOCKS

DAILY % YTD % X DAILY YTD %

%

Japan -0.26 -6.89 <.n2> !

China EC>

India -0.13 -0.01 <.ns ei>

Indonesi -0.10 +3.91 <.jk a se>

Malaysia -0.24 -4.62 <.kl se>

Philippi -0.56 -1.26 <.ps nes i>

S.Korea 11>

Singapor -0.06 -1.07 <.st e i>

Taiwan +0.06 +0.24 <.tw ii>

Thailand -0.42 -0.66 <.se ti>

(Reporting by Mehr Bedi in Bengaluru; Editing by Sonia Cheema)