* Samsung Galaxy Note 7 scrap may hit Korea exports -analyst
* Ringgit over 7-month trough on disappointing output data
* EM Asian currencies recover losses on pound rebound
(Adds text, updates prices)
By Jongwoo Cheon
SINGAPORE, Oct 12 Most emerging Asian currencies
fell on Wednesday as expectations grow of a U.S. interest rate
hike in December, but they later pared losses as the British
pound's rebound hurt the dollar.
The South Korean won fell to its weakest in more
than three weeks as Samsung Electronics Co Ltd's
decision to scrap its fire-prone Galaxy Note 7 is seen hurting
Malaysia's ringgit hit an over seven-month trough
after factory output in August rose less than expected.
The Thai baht slumped to a near four-month low as
Bangkok shares lost almost 3 percent, far
underperforming regional peers.
The dollar on Tuesday touched its highest since March
against a basket of six major currencies as investors priced in
around a 70 percent chance of the Federal Reserve's tightening
The U.S. currency also found support as Democratic
presidential nominee Hillary Clinton widened her lead in opinion
polls over Republican rival Donald Trump for the Nov. 8
The greenback broadly eased on Wednesday in Asia as sterling
clawed back some of its recent losses, but sentiment
towards emerging Asian currencies stayed bearish.
"Asian currencies are likely to weaken further into U.S.
elections and the Fed meeting with sustained expectations of
tightening," said Christopher Wong, a senior FX strategist for
Maybank in Singapore.
"Inflationary pressures are likely to pick up if we continue
to see oil prices stabilising at current levels as demand-supply
rebalances. The U.S. is the one who is capable to tightening
The won lost 0.4 percent to 1,124.8 per dollar, its weakest
since Sept. 19.
The halt to production of the Note 7 and strikes at Hyundai
Motor Co are expected to reduce South Korea's
exports in the fourth quarter by 3.4 percent, said HI Investment
Samsung is the world's top smartphone maker and Hyundai the
world's fifth-largest automaker.
"Lower exports along with higher oil prices are likely to
hurt the country's trade account. That will ease upward pressure
on the won or lift dollar/won," the brokerage said.
Samsung's decision is also likely to reduce dollar supply
from the company for export settlements, traders said.
Exporters' demand for the won is a usual supporting factor
for the currency.
"Samsung usually sells dollars whenever necessary rather
than taking hedging positions. After the step, such dollar
supply may decrease," said a South Korean bank trader in Seoul,
referring to Samsung's move on Note 7.
Foreign investors kept selling Samsung's shares. They sold a
net 473.9 billion won ($422.3 million) worth of Seoul shares
by early afternoon and Samsung accounted for nearly half
of the selling, a local brokerage data showed.
The ringgit lost 0.5 percent to 4.1900 per dollar, its
weakest since March 1.
The Malaysian currency came under further pressure from
falling government bond prices. Foreign investors cut
the country's bond holdings in September, central bank data
"We tactically lowered our outlook on MGS from neutral to
mildly bearish," said Winson Phoon, fixed income analyst at
Maybank Investment Bank, in Kuala Lumpur, referring to Malaysian
Phoon expected the 10-year bond yield to rise to
3.65-3.70 percent by the end of this year. The yield is now
around 3.596 percent.
He also said foreign investors may reduce Malaysian bond
holdings given expectations of a U.S. rate hike.
The currency may weaken to 4.2027, the 61.8 percent
Fibonacci retracement of its appreciation in this year, analysts
CURRENCIES VS U.S. DOLLAR
Change on the day at 0500 GMT
Currency Latest bid Previous day Pct Move
Japan yen 103.56 103.50 -0.06
Sing dlr 1.3784 1.3794 +0.07
Taiwan dlr 31.605 31.613 +0.03
Korean won 1122.10 1120.40 -0.15
Baht 35.42 35.30 -0.34
Peso 48.605 48.520 -0.17
Rupiah 13015 13010 -0.04
*Rupee 66.53 66.53 0.00
Ringgit 4.1820 4.1700 -0.29
Yuan 6.7198 6.7185 -0.02
Change so far in 2016
Currency Latest bid End prev year Pct Move
Japan yen 103.56 120.30 +16.16
Sing dlr 1.3784 1.4177 +2.85
Taiwan dlr 31.605 33.066 +4.62
Korean won 1122.10 1172.50 +4.49
Baht 35.42 36.00 +1.64
Peso 48.61 47.06 -3.18
Rupiah 13015 13785 +5.92
Rupee 66.53 66.15 -0.57
Ringgit 4.1820 4.2935 +2.67
Yuan 6.7198 6.4936 -3.37
* Indian financial markets are closed for holidays. Trading
will resume on Thursday.
(Reporting by Jongwoo Cheon; Additional reporting by Choonsik
Yoo and KyoungHo Lee in SEOUL; Editing by Kim Coghill)