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EM ASIA FX-Deutsche Bank woes haunt Asia FX; monthly, quarterly gains seen
September 30, 2016 / 6:31 AM / a year ago

EM ASIA FX-Deutsche Bank woes haunt Asia FX; monthly, quarterly gains seen

* Philippine peso to see worst month in 16 years
    * Philippine's Duterte linked himself to Hitler
    * Rupee up on pause in India-Pakistan geopolitical tension
    * Won, rupiah lead September EM Asia FX appreciation

 (Adds text, updates prices)
    By Jongwoo Cheon
    SINGAPORE, Sept 30 (Reuters) - Most emerging Asian
currencies fell on Friday as worries about Deutsche Bank soured
risk sentiment, darkening the outlook for the regional units,
despite monthly and quarterly gains on expectations of gradual
U.S. interest rate hikes.
    India's rupee avoided the losses seen in regional
peers on a pause in the escalation of ongoing India-Pakistan
geopolitical tensions.
    The Philippine peso hit a fresh seven-year low to
suffer its worst month in 16 years as on deepening fears that
President Rodrigo Duterte's policies may keep driving foreign
investors out of the country.
    Malaysia's ringgit fell to a 1-1/2-week trough as
month-end corporate dollar demand offset support from higher oil
prices.
    Asian shares slid as Deutsche Bank shares slumped
to a record low after a report that trading clients had
withdrawn excess cash and positions held in the largest German
lender. 
    "Given the nightmare of Lehman, markets shun risky assets
including Asian currencies as potential systemic risks in the
banking sector are enormous," said Jung Sung-yoon, a foreign
exchange analyst at Hyundai Futures in Seoul.
    The collapse of Lehman Brothers sparked the global financial
crisis in 2008-09.
    "Momentum in Asian currencies may slow down in the coming
months on the global risk aversion, as well as uncertainties
surrounding global monetary policies and the U.S. elections,"
Jung said.
            
    RUPIAH, WON
    Most emerging Asian currencies were set to report gains in
September and the third quarter as top Federal Reserve officials
hinted that the U.S. central bank may only raise interest rates
very gradually.
    Indonesia's rupiah has risen 2.1 percent against
the dollar so far this month on tax amnesty-related inflows and
as investors sought one of the highest bond yields in Asia. With
the monthly rise, the currency was on the course for a 1.7
percent quarterly gain.
    The South Korean won has appreciated 1.4 percent
over September, extending its quarterly gain to a 4.8 percent.
That would be the largest quarterly rise since the April-June
2014. Equity inflows and exporters' demand for settlements
boosted the currency.
    Taiwan's dollar has risen 1.3 percent so far this
month to post its largest quarterly gain since early 2011 as
foreigners snapped up local shares.
    However, doubts over further strength in emerging Asian
currencies surfaced.
    November's U.S. presidential election and December's
expected Fed policy decision presented high event risks, said
Emmanuel Ng, foreign exchange strategist at OCBC Bank in
Singapore.
    Ng said it was even unclear whether the Fed would raise
interest rates in December or merely reiterate its intention to
tighten gradually.
    Some regional units were set to experience monthly and
quarterly depreciation.
    The peso has lost 3.9 percent so far in September, which
would be its largest monthly loss since October 2000.
    Philippine President Duterte on Friday appeared to liken
himself to Adolf Hitler, saying he would "be happy" to
exterminate three million drug users and peddlers in the
country. 
    The large number of killings in his war on drugs has drawn
widespread international criticism, including from the United
Nations, triggering angry responses from Duterte. His
anti-American outbursts have startled investors.
    The ringgit has fallen 2.2 percent through September, 
increasing its quarterly loss to 2.8 percent, as Malaysian
government bond prices fell on the absence of further
monetary easing by major central banks.
    
    CURRENCIES VS U.S. DOLLAR
    Change on the day at 0450 GMT
  Currency                 Latest bid   Previous day   Pct Move
  Japan yen                    101.24         101.04      -0.20
  Sing dlr                     1.3652         1.3642      -0.07
  Taiwan dlr                   31.320         31.356      +0.11
  Korean won                  1099.50        1098.80      -0.06
  Baht                          34.69          34.63      -0.17
  Peso                         48.485         48.330      -0.32
  Rupiah                        12995          12970      -0.19
  Rupee                         66.66          66.85      +0.28
  Ringgit                      4.1410         4.1220      -0.46
  Yuan                         6.6698         6.6695      -0.00
                                                               
  Change so far in 2016                                        
  Currency                 Latest bid  End prev year   Pct Move
  Japan yen                    101.24         120.30     +18.83
  Sing dlr                     1.3652         1.4177      +3.85
  Taiwan dlr                   31.320         33.066      +5.57
  Korean won                  1099.50        1172.50      +6.64
  Baht                          34.69          36.00      +3.78
  Peso                          48.49          47.06      -2.94
  Rupiah                        12995          13785      +6.08
  Rupee                         66.66          66.15      -0.76
  Ringgit                      4.1410         4.2935      +3.68
  Yuan                         6.6698         6.4936      -2.64
 
 (Reporting by Jongwoo Cheon; Editing by Eric Meijer)

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