Asian FX decline on dollar strength; Philippines inflation soars

Asian emerging stocks and currencies were trading lower on Tuesday, hit by regional inflation, extended U.S. Federal Reserve rate-hike worries and a firm dollar.

Annual inflation in the Philippines rose 8.0% in November from a year earlier, bolstering the case for a half-percentage point interest rate hike this month.

"Given the elevated inflation, especially rising pressure from core services inflation, we continue to expect the BSP (Bangko Sentral ng Pilipinas) to deliver a 50 basis points hike in its December meeting," analysts at Goldman Sachs said.

Phillipines' central bank has raised rates six times this year to meet its annual inflation target of 2%-4%. Last week, its governor flagged another 25 bps or 50 bps hike at the Dec. 15 meeting.

The peso USDPHP, which has lost about 9% so far this year, was flat among broadly lower Asian emerging currencies. Stocks in Manila PPSEI soared 2.6%.

The dollar index DXY rose 0.2% to 105.42 after strong U.S. services data strengthened the greenback and fuelled bets over the Federal Reserve maintaining its higher for longer stance on further interest rate hikes.

Uncertainty over the Fed's intentions overshadowed optimism about China beginning to relax its zero-COVID strategy and sapped sentiment for risky Asian assets.

Poon Panichpibool, a markets strategist at Krung Thai Bank, said the U.S. dollar could peak over the medium-to-long-term, helping Asian currencies outperform the dollar next year.

South Korea's won USDKRW and Indonesia's rupiah USDIDR depreciated 1.8% and 0.7%, respectively, while India's rupee USDINR fell 0.6%. Malaysia's ringgit USDMYR retreated 0.3%.

Thailand's baht USDTHB depreciated 0.9%, while stocks in Bangkok SET shed 0.4%.

The Singapore dollar USDSGD appreciated 0.1% - the only bright spot among Asian emerging currencies.

Equity markets in Asia remained on the backfoot, with stocks in Jakarta COMPOSITE and Mumbai NIFTY declining 1.4% and 0.4%, respectively.

HIGHLIGHTS:

** Indonesian 10-year benchmark yields rise 8.2 basis points to 6.925%

** India's economy expected to grow 6.9% this year - World Bank

** China may announce 10 new COVID easing steps on Weds -sources

** Investors look to emerging markets as planets align for end of dollar bull market - analysis

The following table shows rates for Asian currencies against the dollar at 0622 GMT.