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EM ASIA FX-Asian currencies inch lower, focus on Trump-Xi meeting
April 4, 2017 / 4:41 AM / 5 months ago

EM ASIA FX-Asian currencies inch lower, focus on Trump-Xi meeting

    * Asian currencies take breather after their recent gains
    * Won, baht, peso and ringgit inch lower
    * Singapore c.bank expected to keep policy steady next week

 (Adds text, updates prices)
    By Masayuki Kitano
    SINGAPORE, April 4 (Reuters) - Asian currencies edged lower
on Tuesday as investors turned cautious on riskier assets ahead
of a meeting between U.S. President Donald Trump and Chinese
President Xi Jinping later in the week.
    The South Korean won slipped 0.2 percent against
the dollar, with market participants focusing on what Trump and
Xi might say about their strategies on North Korea.
    The Thai baht fell 0.2 percent, while the Malaysian
ringgit eased 0.1 percent.
    Trump is due to host Xi on Thursday and Friday at his Mar-a
Lago retreat in Florida.
    Trump had set the tone for a tense first meeting with Xi by
tweeting last Thursday that the United States could no longer
tolerate massive trade deficits and job losses.    
    "There seems to be some lingering caution," said Hirofumi
Suzuki, economist for Sumitomo Mitsui Banking Corporation (SMBC)
in Singapore, adding that one risk is that U.S.-China relations
could worsen and have negative knock-on effects on Asian
economies.
    Christopher Wong, senior FX strategist for Maybank, however,
said Asian currencies could edge higher ahead of the U.S.-China
summit.     
    "We believe the Xi-Trump meeting could reignite tensions on
trade and currencies," Wong said.
    In the lead up to the meeting, the U.S. dollar may face
downside pressure against the currencies of trade surplus
countries that are seen as facing the risk of being labelled
currency manipulators by the United States, Wong said.
    The greenback could come under pressure against currencies
such as the offshore Chinese yuan, South Korean won
 and Taiwan dollar, he added.
    
    SINGAPORE DOLLAR
    Singapore's central bank is expected to keep its monetary
policy settings unchanged at its April review expected next
week, but some analysts see the risk of tightening later in the
year in response to rising inflation and as exports were on the
mend, according to a Reuters poll.
    The Monetary Authority of Singapore (MAS) manages monetary
policy by changes to the exchange rate, letting the Singapore
dollar's nominal effective exchange rate (NEER) rise or fall
within in an undisclosed policy band. 
    One focus among analysts is whether the central bank will
make any changes to the forward guidance it introduced in its
last policy statement in October, when MAS stood pat and
maintained a stance of zero percent appreciation for the
Singapore dollar NEER's policy band.
    The central bank said in October that it "assesses that a
neutral policy stance will be needed for an extended period to
ensure medium-term price stability."
    A removal of that guidance could stoke market speculation
about the risk of the MAS tightening policy later this year,
analysts say.
    That forward guidance will probably be kept in the April
policy statement, said SMBC's Suzuki, adding that the central
bank likely wants to see a sustained economic recovery and a
pick-up in inflation before removing it.
    
    CURRENCIES VS U.S. DOLLAR 
  Change on the day at   0418 GMT                    
  Currency               Latest bid   Previous    Pct
                                           day   Move
  Japan yen                  110.45     110.89  +0.39
  Sing dlr                   1.3963     1.3969  +0.04
  Taiwan dlr                 30.336     30.336  +0.00
  Korean won                1117.90    1115.30  -0.23
  Baht                        34.42      34.35  -0.19
  Peso                       50.145     50.120  -0.05
  Rupiah                      13324      13320  -0.03
  Rupee                       65.02      65.03  +0.02
  Ringgit                    4.4300     4.4260  -0.09
  Yuan                       6.8835     6.8835  -0.00
                                                     
  Change so                                          
 far in 2017                                    
  Currency               Latest bid   End prev    Pct
                                          year   Move
  Japan yen                  110.45     117.07  +5.99
  Sing dlr                   1.3963     1.4490  +3.77
  Taiwan dlr                 30.336     32.279  +6.40
  Korean won                1117.90    1207.70  +8.03
  Baht                        34.42      35.80  +4.03
  Peso                        50.15      49.72  -0.85
  Rupiah                      13324      13470  +1.10
  Rupee                       65.02      67.92  +4.46
  Ringgit                    4.4300     4.4845  +1.23
  Yuan                       6.8835     6.9467  +0.92
 *Markets in India are closed on Tuesday for holiday.
 
*China, Taiwan markets are closed April 3-4 for holiday.
         

 (Reporting by Masayuki Kitano; Editing by Kim Coghill)
  
 
 

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