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EMERGING MARKETS-U.S. dollar weakness and easing China COVID curbs boost Asian currencies

* China's yuan leads Asian currencies higher * Vietnam's dong rises nearly 2% * Singapore dollar hits highest since late-Feb By Upasana Singh Dec 5 (Reuters) - Most Asian emerging currencies strengthened on Monday as a weaker U.S. dollar and signs of China easing its strict zero-COVID strategy lifted risk sentiment, with the yuan leading gains alongside Vietnam's dong. The yuan rose 1.4% against the dollar, hitting its highest since Sept. 13, while stocks in Shanghai advanced 1.5%. On Sunday, more Chinese cities announced an easing of coronavirus curbs, spurring the world's second-largest economy to move towards softening its stance on the zero-COVID strategy that prompted unprecedented protests last weekend. The easing COVID curbs raised hopes over the global growth outlook and increased demand for commodities in Southeast Asia's biggest trading partner, thereby boosting investors' appetite for riskier assets. "A China shifting towards a more dynamic, flexible COVID strategy would reduce the risk of weaker growth and should boost optimism on China and related assets," analysts at Barclays said. The dollar index, which measures the greenback against six major peers, fell 0.2% to 104.23. Analysts at Morgan Stanley upgraded their stance on emerging markets as well as China to "overweight," underpinned by Beijing's easing COVID policy and the resultant likely normalisation in the economy, as well as a sustained weakening in the U.S. dollar. The Vietnamese dong appreciated 1.9% and posted its best session since Sept. 2010 on broader weakness in dollar and inflows from foreign borrowings by Vietnam Technological And Commercial Joint Stock Bank and Masan Group, according to a market source. Malaysia's ringgit, which has lost 4.6% so far this year, firmed 0.5% to hit its highest level since May 6. Since last week, the currency has drawn support from the appointment of Anwar Ibrahim as prime minister. Anwar, who will also serve as Malaysia's finance minister, announced new cabinet appointments on Friday. Markets are now waiting for a revised 2023 budget before the year end. "The unveiling of the new cabinet 'relatively' quickly helped remove some political uncertainty," analysts at Maybank wrote in a note. Elsewhere, the Philippines lowered its economic growth target for 2023, taking into account an anticipated weakening in global activity, but kept its expansion goals for the succeeding five years. The peso depreciated 0.2%, while stocks in Manila rose 0.6%. Equities in Asia were mixed, with South Korea's benchmark index and stocks in Mumbai shedding 0.6% and 0.3%, respectively. Singapore's benchmark index added 0.4%. Markets in Thailand were closed on account of a public holiday. HIGHLIGHTS: ** China extends bilateral currency swap agreement with Macau for three years ** Indonesia says digital rupiah currency can be used in metaverse ** Indonesian 10-year benchmark yields rise 3.7 basis points to 6.880% The following table shows rates for Asian currencies against the dollar at 0625 GMT. Asia stock indexes and currencies at 0625 GMT COUNTRY FX RIC FX FX INDE STOCKS STOCKS DAILY % YTD % X DAILY YTD % % Japan -0.21 -14.4 <.N2 0.15 -3.37 9 25> China EC> India -0.32 -8.89 <.NS -0.28 7.43 EI> Indonesi +0.10 -7.53 <.JK -0.03 6.63 a SE> Malaysia +0.46 -4.56 <.KL -0.62 -6.06 SE> Philippi -0.21 -8.64 <.PS 0.62 -8.32 nes I> S.Korea 11> Singapor +0.45 +0.25 <.ST 0.44 4.79 e I> Taiwan +0.49 -9.08 <.TW 0.07 -17.77 II> Thailand - -3.90 <.SE - -0.96 TI> (Reporting by Upasana Singh in Bengaluru, additional reporting by Tom Westbrook in Singapore; Editing by Dhanya Ann Thoppil)