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EM ASIA FX-ECB hope, solid China data support Asia FX, bonds; yuan resists
December 8, 2016 / 5:03 AM / 8 months ago

EM ASIA FX-ECB hope, solid China data support Asia FX, bonds; yuan resists

5 Min Read

* Yuan eases on dollar demand among Chinese corporates
    * Won, Taiwan dollar hit 1-month peaks on equity inflows
    * Indonesia's rupiah touches 4-week high, bonds rise

 (Adds text, updates prices)
    By Jongwoo Cheon
    SINGAPORE, Dec 8 (Reuters) - Most emerging Asian currencies
and bonds rose on Thursday, helped by expectations that the
European Central Bank will likely extend its asset-purchase
programme at its policy meeting later in the day, keeping
investors on the hunt for higher returns in Asia.
    China's exports and imports unexpectedly rose in November,
indicating a pick-up in the world's second-largest economy and
major trading partner of other Asian countries.
    The South Korean won and the Taiwan dollar
 hit near one-month peaks on equity inflows.
    Indonesia's rupiah raced to a near four-week high
on solid demand for local bonds among foreign investors.
    Bucking the trend, the Chinese yuan edged down on
local corporate dollar demand. 
    The ECB will extend its already generous asset buys, aiming
to boost stubbornly weak price growth, although with much of its
firepower exhausted, it may also debate sending a token signal
about the eventual end of such purchases. 
    "Asian currencies could strengthen further as the ECB's easy
stance is likely to spur more rallies in emerging-market assets,
while a Fed rate hike view in December is fully priced in," said
Jeong My-young, Samsung Futures research head in Seoul,
referring to the Federal Reserve.
    The U.S. central bank is widely expected to raise interest
rates next week.
    
    WON
    The won rose nearly 1 percent to 1,156.5 per dollar, its
strongest since Nov. 10.
    Seoul shares had advanced 1.3 percent by
mid-afternoon as foreign investors were set to extend their
buying spree to a third straight session.
    The South Korean currency pared some of its gains with a
chart resistance line at 1,157.9, the 50 percent Fibonacci
retracement of its depreciation since Donald Trump's victory in
the U.S. Presidential election, analysts said.
    But the won may strengthen to 1,151.0, the 61.8 percent
retracement, once the level is cleared, they added.
    Investors were closely watching Friday's impeachment vote in
parliament on President Park Geun-hye, although markets almost
ignored the finance ministry's concerns about further risks to
the economy from "domestic issues." 
    
    TAIWAN DOLLAR
    The Taiwan dollar gained 0.6 percent to 31.699 per the U.S.
dollar, its strongest since Nov. 10, in thin trading.
    Foreign financial institutions bought the Taiwan dollar,
with local stocks up more than 1 percent.
    The island nation's stock market reported combined inflows 
of T$8.5 billion ($268.0 million) for the previous two sessions.
    Importers purchased the U.S. dollar for payments on dips,
limiting the Taiwan dollar's upside.
    
    RUPIAH
    The rupiah advanced 0.3 percent to 13,275 per dollar, its
strongest since Nov. 11.
    Most Indonesian government bond prices rose with
the 10-year yield at 7.691 percent, its lowest since
Nov. 14.
    
    CURRENCIES VS U.S. DOLLAR
    Change on the day at 0430 GMT
  Currency               Latest bid   Previous day  Pct Move
  Japan yen                  113.35         113.74     +0.34
  Sing dlr                   1.4165         1.4168     +0.02
  Taiwan dlr                 31.715         31.902     +0.59
  Korean won                1157.80        1167.90     +0.87
  Baht                        35.61          35.63     +0.06
  Peso                       49.630         49.750     +0.24
  Rupiah                      13285          13320     +0.26
  Rupee                       67.46          67.63     +0.26
  Ringgit                    4.4270         4.4300     +0.07
  Yuan                       6.8792         6.8720     -0.10
                                                            
  Change so far in 2016                                     
  Currency               Latest bid  End prev year  Pct Move
  Japan yen                  113.35         120.30     +6.13
  Sing dlr                   1.4165         1.4177     +0.08
  Taiwan dlr                 31.715         33.066     +4.26
  Korean won                1157.80        1172.50     +1.27
  Baht                        35.61          36.00     +1.09
  Peso                        49.63          47.06     -5.18
  Rupiah                      13285          13785     +3.76
  Rupee                       67.46          66.15     -1.94
  Ringgit                    4.4270         4.2935     -3.02
  Yuan                       6.8792         6.4936     -5.61
 
 (Reporting by Jongwoo Cheon; Additional reporting by Jeanny Kao
in TAIPEI; Editing by Subhranshu Sahu)

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