* Resurgent dollar clocks second week of gains * Asian equities log worst week in nearly one year * Rupiah logs worst week since March 2020 By Roushni Nair April 19 (Reuters) - Emerging Asian equities and currencies were sharply lower on Friday as reports that Israel attacked Iran in an escalation of tensions in the Middle East led investors to dump risk assets and flee toward safe-haven assets, including the U.S. dollar. South Korean won fell 0.7% against the dollar by 0410 GMT, leading the decline in the region, while the Indonesian rupiah depreciated as much as 0.7%, to mark its lowest level since April 8, 2020. MSCI's emerging market currency index fell by 0.5% to its weakest level since Nov. 17. The index, which has been hobbled by a resurgent dollar this year, is on track to mark its worst week since Jan. 19, having already given up nearly 0.5% this week. Asian equities followed suit with massive losses as sentiment went sour after reports indicated Israel had hit Iran earlier in the day. Equities in Bangkok, Seoul and Manila all retreated nearly 2%. MSCI's broadest index of Asia-Pacific shares outside Japan sank to its worst week since June 23, 2023, losing nearly 4% so far. A hawkish repricing of interest rate cut expectations for the U.S. Federal Reserve has kept the dollar buoyant to the detriment of riskier Asian currencies, after strong U.S. data and statements from policymakers indicated the fight against inflation is not over. The U.S. dollar index - a measure of the greenback against six major rivals - was last at 106.19, just below the five-month peak of 106.51 touched earlier this week. The index has been gaining for two straight weeks. "We continue to see dollar strength weigh on EM Asia FX performance in the near term as markets re-price expectations for a rate cut from the Fed this year, with geopolitical tensions in the Middle East expected to further exacerbate pressure on EM Asia assets," Aditya Sharma, emerging market strategist at NatWest Markets, told Reuters. In Asia, the rupiah is set for its worst week since March 2020, giving up nearly 3% so far. Indonesia's high-yielding bond market has also lost appeal due to currency volatility and the wafer-thin spreads it offers over dollar markets, with market participants now pricing in the possibility that Bank Indonesia (BI) will start hiking rates. The Philippine peso and Taiwan dollar lost more than 4%, each, while Thailand's baht was marginally down 0.2%. The peso is set for its worst week since February 2023. In Malaysia, the economy is estimated to have grown 3.9% in the first quarter of 2024 from a year earlier, driven by growth in its services sector. The ringgit traded largely flat, while equities in Kuala Lumpur advanced 0.4%. HIGHLIGHTS: ** Indonesian 10-year benchmark yields rise 9.9 basis points to 7.009% ** Malaysia's March exports fall 0.8% y/y Asia stock indexes and currencies at 0449 GMT COUNTRY FX RIC FX FX INDEX STOCK STOCK DAILY YTD % S S YTD % DAILY % % Japan +0.18 -8.61 -2.35 11.71 ChinaIndia +0.05 -0.34 -0.47 0.74 Indones -0.61 -5.38 -1.45 -2.88 ia Malaysi +0.08 -3.91 0.43 6.65 a Philipp -0.37 -3.67 -1.71 -0.59 ines S.Korea Singapo -0.03 -3.18 -0.59 -2.20 re Taiwan -0.47 -5.52 -3.27 9.52 Thailan -0.20 -7.32 -1.80 -5.60 d (Reporting by Roushni Nair in Bengaluru; Editing by Tom Hogue)
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1.071 USD | -0.09% | +0.07% | - | ||
99.87 PTS | +0.16% | +0.76% | - | ||
4.014 ILS | +0.01% | -1.16% | - | ||
- PTS | -.--% | +1.02% | - | ||
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- Surging dollar pressures Asian FX; S.Korean won leads losses