January 4, 2017 / 9:05 AM / 8 months ago

EM ASIA FX -Ringgit drops to 19-year low against stronger dollar

* Ringgit touches 19-year low vs dollar, eases 0.2 pct
    * Baht slips, partly pressured by Thai bond outflows
    * Yuan firmer after China state banks sell dollars
    * Rupee edges up, helped by exporters' dollar-selling

 (Adds text, updates prices)
    SINGAPORE, Jan 4 (Reuters) - The Malaysian ringgit briefly
touched a 19-year low against the dollar on Wednesday, as the
greenback continued to strengthen on expectations of further
U.S. interest rate hikes later this year.
    The ringgit fell as low as 4.4980 per U.S. dollar,
its weakest level since January 1998, during the Asian financial
crisis. It last stood at 4.4970, down 0.2 percent on the day. 
    "Dollar/ringgit is under a lot of upward pressure...
Especially getting so close to the 4.5 levels, there's a lot of
nervousness among the investors," said Andy Ji, Asian currency
strategist for Commonwealth Bank of Australia in Singapore.
    He added that the ringgit, which is particularly vulnerable
to rises in U.S. interest rates because of the high foreign
ownership of Malaysian bonds, could fall to 5.0 versus the
dollar by the end of this year.
    The ringgit and other Asian currencies have declined broadly
since early November as U.S. bond yields and the dollar jumped
on expectations that President-elect Donald Trump's proposals
for infrastructure spending and tax cuts will boost U.S.
economic growth and inflation.
    Downward pressure on Asian currencies has persisted after
the U.S. Federal Reserve raised interest rates in December and
signalled three hikes in 2017.
    The dollar index last stood at 103.06. It had risen 
to 103.82 on Tuesday, its strongest level since December 2002,
after data showed solid growth in U.S. manufacturing.
 
    The Thai baht eased 0.1 percent, pressured partly
by outflows from Thai bonds, traders said.
    Other Asian currencies showed resilience, however. 
    The Chinese yuan rose 0.2 percent after the
central bank set a stronger-than-expected daily trading midpoint
and state banks sold dollars. 
    The Indian rupee edged higher, partly due to
dollar-selling by local exporters. 
        
    CURRENCIES VS U.S. DOLLAR   
  Change on the day at   0833 GMT                      
  Currency               Latest bid   Previous      Pct
                                           day     Move
  Japan yen                  117.80     117.74    -0.05
  Sing dlr                   1.4458     1.4499    +0.28
  Taiwan dlr                 32.250     32.245    -0.02
  Korean won                1201.89    1203.50    +0.13
  Baht                        35.84      35.80    -0.09
  Peso                       49.670     49.775    +0.21
  Rupiah                      13440      13478    +0.28
  Rupee                       68.12      68.34    +0.32
  Ringgit                    4.4970     4.4900    -0.16
  Yuan                       6.9488     6.9628    +0.20
                                                       
  Change so                                            
 far in 2017                                    
  Currency               Latest bid   End prev      Pct
                                          year     Move
  Japan yen                  117.80     117.07    -0.62
  Sing dlr                   1.4458     1.4490    +0.22
  Taiwan dlr                 32.250     32.279    +0.09
  Korean won                1201.89    1207.70    +0.48
  Baht                        35.84      35.80    -0.09
  Peso                        49.67      49.72    +0.10
  Rupiah                      13440      13470    +0.22
  Rupee                       68.12      67.92    -0.29
  Ringgit                    4.4970     4.4845    -0.28
  Yuan                       6.9488     6.9467    -0.03
    

 (Reporting by Masayuki Kitano; Additional reporting by
Satawasin Staporncharnchai in BANGKOK, IFR Markets' Catherine
Tan and Michelle Chen in HONG KONG; Editing by Randy Fabi)

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