June 23, 2017 / 6:14 AM / 2 months ago

EM ASIA FX-Asian currencies tread water; yuan headed for worst week since March

 (Adds text, updates prices)
    By Shashwat Pradhan
    June 23 (Reuters) - Most emerging Asian currencies were
range-bound on Friday as traders marked time ahead of next
week's U.S. inflation-linked indicators, while China's yuan
remained on track for its biggest weekly fall since early March.
    The U.S. data due next week includes the June consumer
confidence indicator, pending home sales, crude oil inventories,
revised first quarter GDP and the PCE price index.
    The dollar index against a basket of major currencies was
effectively flat at 97.492
    The Singapore dollar was among the biggest gainers,
edging up 0.1 percent, which was boosted by news Singapore's
industrial production in May grew for the 10th consecutive month
from a year earlier.
     The currency, however, remains on track for its biggest
weekly fall since early May.
    "The confluence of a slightly more aggressive pace of FOMC
balance-sheet unwinding, as well as a still intended third 25
basis points rate hike later this year, have contributed to a
higher dollar against the Singapore currency," OCBC Bank said in
a note.
    The Philippine peso edged up 0.1 percent after the central
bank left key interest rates unchanged and cut its forecast for
inflation this year, a move likely to reduce expectations for at
least one rate hike in the second half.
    Despite the modest gains, the Philippine currency is headed
for its worst week since Nov. 2016.
    The Taiwanese dollar traded flat against the dollar
after Taiwan's central bank left its policy rate unchanged, as
widely expected, with robust tech exports providing a strong
anchor for the economy and inflation remaining
subdued.

    CHINESE YUAN
    
    The yuan edged lower on Friday to its weakest 
since May 31, dampened by weaker guidance and rising corporate
demand for the dollar.
    The Chinese currency is down 0.4 percent for the week, on
track for its biggest weekly fall since March 3.
    Several traders noted that major state-owned banks were
selling dollars to keep the spot yuan at
firmer-than-6.83-per-dollar levels in late afternoon trade this
week.
    The yuan is headed for its seventh falling day in what would
be its longest streak of losses since Oct. 2016. 
    
    MALAYSIAN RINGGIT
    
    The Malaysian ringgit was trading within a narrow
range on Friday, as it remains on track for its biggest weekly
fall since early March.
    On Thursday, Standard and Poor's said the corruption scandal
at 1Malaysia Development Berhad (1MDB) and upcoming elections
pose potential challenges for Malaysia's sovereign rating in the
short term.
    S&P also flagged a few credit risks: high share of foreign
ownership of Malaysia's ringgit-denominated government bonds,
and the central bank's record-high forward position on its
foreign-exchange reserves.
    Foreigners, who had held about half of the outstanding
Malaysian government bonds, fled the market between November
2016 and March this year after the central bank said it could no
longer trade in ringgit non-deliverable forwards. Investors
started to return in April.
    
    The following table shows rates for Asian currencies against
the dollar at 0559 GMT.
    
    CURRENCIES VS U.S. DOLLAR
    
  Currency               Latest bid  Previous day   Pct Move
  Japan yen              111.280           111.32      +0.04
  Sing dlr               1.388             1.3899      +0.13
  Taiwan dlr             30.444            30.442      -0.01
  Korean won             1139.100          1140.9      +0.16
  Baht                   33.943             33.97      +0.08
  Peso                   50.310            50.345      +0.07
  Rupiah*                13325.000          13325      +0.00
  Rupee                  64.523             64.59      +0.10
  Ringgit                4.287             4.2855      -0.03
  Yuan                   6.840             6.8368      -0.04
                                                            
  Change so far in 2017                                     
  Currency               Latest bid  End 2016       Pct Move
  Japan yen              111.280           117.07      +5.20
  Sing dlr               1.388             1.4490      +4.39
  Taiwan dlr             30.444            32.279      +6.03
  Korean won             1139.100         1207.70      +6.02
  Baht                   33.943             35.80      +5.47
  Peso                   50.310             49.72      -1.17
  Rupiah*                13325.000          13470      +1.09
  Rupee                  64.523             67.92      +5.27
  Ringgit                4.287             4.4845      +4.61
  Yuan                   6.840             6.9467      +1.56
 The Indonesian market was closed for a holiday.
     
    
    

 (Reporting by Shashwat Pradhan in Bengaluru; Editing by Eric
Meijer)
  
 
 

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