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EM ASIA FX-Asia currencies slip but most on track for Q1 gains; won, Taiwan dlr outperform
March 31, 2017 / 6:23 AM / 5 months ago

EM ASIA FX-Asia currencies slip but most on track for Q1 gains; won, Taiwan dlr outperform

    * Asian currencies edge lower vs dollar
    * But most Asian currencies on track for quarterly gains
    * Won and Taiwan dollar best performers in Jan-March

 (Adds text, updates prices)
    By Masayuki Kitano
    SINGAPORE, March 31 (Reuters) - Asian currencies eased on
Friday but most remained on track for quarterly gains, supported
by inflows and as the dollar was weighed down by uncertainty
over the Trump administration's economic policy agenda.
    Asian currencies showed little reaction on Friday to news
that U.S. President Donald Trump will sign executive orders to  
identify abuses that are causing massive U.S. trade deficits and
clamp down on non-payment of anti-dumping and anti-subsidy
duties on imports.
    Most emerging Asian currencies were slightly lower on the
day, with the Taiwan dollar, South Korean won
 and Chinese yuan all slipping 0.1 percent.
    The new U.S. executive orders have mixed implications for
emerging Asian currencies, said Trinh Nguyen, senior economist
for Natixis.
    "A lot of Asian countries have non-tarrif barriers to trade
and so if the U.S. tries to level the playing field in this
regard, it will make Asian exports less competitive. This should
push downward pressure on the currencies," Nguyen said. 
    At the same time, the U.S. focus on addressing its trade
deficits with trading partners could make some Asian authorities
reluctant to intervene in foreign exchange markets, she said. 
    "This comes with a caveat that most Asian countries have
current account surpluses....This means that Asian central banks
are also likely to intervene less to avoid being labelled a
currency manipulator," Nguyen said.
    A U.S. Treasury Department report on the foreign exchange
policies of major trading partners is expected in mi-April, and
large Asian exporters are concerned the report could label them
currency manipulators and possibly lead to punitive tariffs.
    South Korea's finance minister said last week the
possibility of the United States branding South Korea a currency
manipulator could not be ruled out.     
    Separately, there have been signs recently that Taiwan's
central bank has pulled back on intervention to weaken the
Taiwan dollar amid such concerns about the U.S. report.
    
    Against this backdrop, the won and Taiwan dollar have
outperformed, helped by foreign investor inflows into South
Korean and Taiwanese equities. 
    The won has risen roughly 8 percent versus the U.S. dollar
this quarter, putting the won on track for its best quarter
since the third quarter of 2009.
    The Taiwan dollar has advanced about 6.4 percent
against the U.S. dollar this quarter, putting it on track for
fts best quarter since the first quarter of 2008.
    Most Asian currencies were on track for quarterly gains
versus the greenback, which has been hampered by uncertainty 
over the prospects for pro-growth fiscal policies from the Trump
administration.
    
    CHINESE YUAN
    China's yuan slipped against the dollar as investors braced
for a tense first meeting between U.S. President Donald Trump
and Chinese President Xi Jinping next week.
    The leaders of the world's two largest economies are
scheduled to meet next Thursday and Friday for the first time
since Trump assumed office on Jan. 20.
    Trump set the tone by tweeting on Thursday that the United
States could no longer tolerate massive trade deficits and job
losses.
    Going into the summit, there could be some selling of Asian
currencies for position squaring, said Peter Chia, FX strategist
for United Overseas Bank.
    "Heading up to that...we may even see some dollar-buying or
selling of Asian currencies because generally there are gains to
be taken off the table ahead of the big event," he said.

    CURRENCIES VS U.S. DOLLAR      
  Change on the day at   0550 GMT                    
  Currency             Latest bid   Previous      Pct
                                         day     Move
  Japan yen                111.87     111.94    +0.06
  Sing dlr                 1.3975     1.3983    +0.06
  Taiwan dlr               30.353     30.315    -0.13
  Korean won              1118.10    1117.20    -0.08
  Baht                      34.43      34.42    -0.03
  Peso                     50.230     50.200    -0.06
  Rupiah                    13323      13313    -0.08
  Rupee                     64.84      64.92    +0.12
  Ringgit                  4.4240     4.4190    -0.11
  Yuan                     6.8973     6.8886    -0.13
                                                     
  Change so                                          
 far in 2017                                  
  Currency             Latest bid   End prev      Pct
                                        year     Move
  Japan yen                111.87     117.07    +4.65
  Sing dlr                 1.3975     1.4490    +3.69
  Taiwan dlr               30.353     32.279    +6.35
  Korean won              1118.10    1207.70    +8.01
  Baht                      34.43      35.80    +3.99
  Peso                      50.23      49.72    -1.02
  Rupiah                    13323      13470    +1.10
  Rupee                     64.84      67.92    +4.75
  Ringgit                  4.4240     4.4845    +1.37
  Yuan                     6.8973     6.9467    +0.72
  

 (Reporting by Masayuki Kitano)
  
 
 

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