December 22, 2016 / 4:57 AM / 8 months ago

EM ASIA FX-Won and Taiwan dollar hit multi-month lows

* Won hits 1,200 level vs U.S. dollar, weakest since March
    * Taiwan dollar steadies after hitting lowest since July
    * U.S. dollar's strong trend likely to persist

 (Adds text, updates prices)
    By Masayuki Kitano
    SINGAPORE, Dec 22 (Reuters) - The South Korean won hit a
more than nine-month low and the Taiwan dollar touched a near
five-month trough on Thursday, as the outlook for Asian
currencies remained clouded by expectations the Fed could raise
rates at a faster pace next year. 
    The South Korean won slipped to as low as 1,200.0
per dollar, its weakest since March.
    The Taiwan dollar touched its lowest level since late July
at 32.080, before recovering on the back of U.S. dollar
selling by local exporters.
    Elsewhere, the Singapore dollar, the Chinese yuan
 and the Thai baht edged lower, while other
Asian currencies were either steady or firmer.
    Market participants say traders might trim some of their
bullish bets on the dollar to book profits with the year-end
approaching, but the trend of a stronger dollar against Asian
currencies was likely to persist. 
    "Short-term, there could be some minor adjustment to the
level of where dollar/Asia is trading," said Christopher Wong, a
senior FX strategist for Maybank in Singapore.
    "But the underlying theme of policy divergence, inflation,
policy uncertainty remain and is expected to keep the overall
trend of a firmer dollar intact."    
    Emerging Asian currencies have declined broadly since early
November, as the dollar and U.S. bond yields jumped on
expectations that U.S. President-elect Donald Trump's proposals
for infrastructure spending and tax cuts will boost economic
growth and inflation.
    Asian currencies have come under renewed pressure after the
Fed raised interest rates last week for the first time in a
year, and also signalled three hikes in 2017.
    Worries about Trump's stance on trade have also weighed on
the currencies of export-dependent countries in Asia. Trump has
pledged to redraw trade deals to win back American jobs, and has
threatened Mexico and China with punitive tariffs.
    "Everyone is looking to buy U.S. dollars on dips," said a
trader for a Malaysian bank in Kuala Lumpur. 
    
    TAIWAN'S CENTRAL BANK    
    Taiwan's central bank will likely leave its key policy rate
unchanged at its rate review due after 0800 GMT on Thursday, but
its outlook for 2017 will be key as the island's export engine
begins to idle after the seasonal holiday boost and global risks
emerge. 
    The discount rate is expected to stay unchanged at 1.375
percent, 14 of the 15 economists polled by Reuters forecast. 
    Central bank governor Perng Fai-nan said at the last
quarterly meeting in September that domestic structural reform
would have to drive growth.
    
    PHILIPPINE CENTRAL BANK
    Strong growth and manageable inflation should let the
Philippine central bank, at its first meeting since the Fed
hiked U.S. interest rates, keep its benchmark interest rate on
hold at 3.0 percent on Thursday. 
    All the 13 economists polled by Reuters said the central
bank would keep the overnight borrowing rate steady at a
monetary policy decision due at 0800 GMT. 
    
    CURRENCIES VS U.S. DOLLAR
 
  Change on the day at   0423 GMT                        
  Currency              Latest bid   Previous    Pct Move
                                          day  
  Japan yen                 117.51     117.56       +0.04
  Sing dlr                  1.4463     1.4450       -0.09
  Taiwan dlr                32.012     32.020       +0.02
  Korean won               1199.30    1193.90       -0.45
  Baht                       36.03      35.99       -0.11
  Peso                      49.980     49.995       +0.03
  Rupiah                     13435      13468       +0.25
  Rupee                      67.87      67.92       +0.07
  Ringgit                   4.4730     4.4770       +0.09
  Yuan                      6.9470     6.9419       -0.07
                                                         
  Change so                                              
 far in 2016                                   
  Currency              Latest bid   End prev    Pct Move
                                         year  
  Japan yen                 117.51     120.30       +2.37
  Sing dlr                  1.4463     1.4177       -1.98
  Taiwan dlr                32.012     33.066       +3.29
  Korean won               1199.30    1172.50       -2.23
  Baht                       36.03      36.00       -0.08
  Peso                       49.98      47.06       -5.84
  Rupiah                     13435      13785       +2.61
  Rupee                      67.87      66.15       -2.53
  Ringgit                   4.4730     4.2935       -4.01
  Yuan                      6.9470     6.4936       -6.53
 
 (Reporting by Masayuki Kitano in SINGAPORE; additional
reporting by Emily Chan in TAIPEI; Editing by Subhranshu Sahu)

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