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EM ASIA FX-Asia FX on track for weekly gains in wake of yuan's surge
January 6, 2017 / 7:24 AM / 9 months ago

EM ASIA FX-Asia FX on track for weekly gains in wake of yuan's surge

* Ringgit, rupiah and baht edge higher
    * Dollar index firmer but still within sight of 3-week low
    * Offshore yuan retreats after record 2-day rally
    * Asian currencies on track for weekly gains

 (Adds text, updates prices)
    SINGAPORE, Jan 6 (Reuters) - Some Asian currencies edged
higher on Friday, with the dollar weighed down by caution ahead
of U.S. jobs data, while the offshore Chinese yuan slipped back
after a record two-day rally.
    The Malaysian ringgit and the Indonesian rupiah
 gained 0.2 percent, and the Thai baht rose 0.1
percent in Friday's onshore trade.
    Most Asian currencies were on track for weekly gains,  after
the rally in the offshore Chinese yuan helped trigger the
unwinding of bullish bets on the dollar. 
    Analysts said emerging Asian currencies could hold firm for
now, with the dollar seen at risk of a further pull-back in the
wake of its rally in the past couple of months.
    "There's a sense that the long dollar trade is a bit
stretched and the dollar has already reflected a lot of the
reflation optimism," said Sim Moh Siong, FX strategist for Bank
of Singapore.    
    "I imagine that at this stage it would take very strong data
to bring back the strong dollar trend," Sim said, referring to
the near-term outlook.    
    The dollar might slip if U.S. jobs data due later on Friday 
shows that nonfarm payrolls increased by around 150,000 to
200,000 in December, Sim added. The median market forecast is an
increase of 178,000. 
    Against a basket of six major currencies, the dollar was
trading at 101.75, having hit a three-week low of 101.30
on Thursday. 
    The dollar has rallied broadly since early November, as U.S.
bond yields jumped on expectations that President-elect Donald
Trump's proposals for infrastructure spending and tax cuts will
boost U.S. economic growth and inflation.     
    
    OFFSHORE AND ONSHORE YUAN      
    The offshore yuan slipped back on Friday to 6.8380 
per dollar, pulling back from a two-month high of 6.7833 set on
Thursday. 
    The offshore yuan had risen more than 2 percent on Wednesday
and Thursday combined, its biggest two-day gain on record,
driven predominantly by a jump in yuan borrowing costs offshore
and tighter liquidity. 
    Traders and analysts suspect that Chinese policymakers have
sought to prevent the yuan from weakening to the 7-per-dollar
level ahead of Trump's inauguration on Jan. 20.
    In onshore trade the yuan erased the previous
day's gains, but was on track for a slight weekly gain of about
0.1 percent. 

    CURRENCIES VS U.S. DOLLAR 
 
  Change on the day at   0717 GMT                            
  Currency                    Latest bid   Previous  Pct Move
                                                day  
  Japan yen                       116.17     115.35     -0.71
  Sing dlr                        1.4333     1.4284     -0.34
  Taiwan dlr                      31.970     31.962     -0.03
  Korean won                     1192.67    1186.30     -0.53
  Baht                             35.72      35.77     +0.14
  Peso                            49.530     49.460     -0.14
  Rupiah                           13350      13370     +0.15
  Rupee                            67.97      67.99     +0.04
  Ringgit                         4.4730     4.4830     +0.22
  Yuan                            6.9399     6.8830     -0.82
                                                             
  Change so                                                  
 far in 2017                                         
  Currency                    Latest bid   End prev  Pct Move
                                               year  
  Japan yen                       116.17     117.07     +0.77
  Sing dlr                        1.4333     1.4490     +1.10
  Taiwan dlr                      31.970     32.279     +0.97
  Korean won                     1192.67    1207.70     +1.26
  Baht                             35.72      35.80     +0.24
  Peso                             49.53      49.72     +0.38
  Rupiah                           13350      13470     +0.90
  Rupee                            67.97      67.92     -0.07
  Ringgit                         4.4730     4.4845     +0.26
  Yuan                            6.9399     6.9467     +0.10
                                                             
 
 (Reporting by Masayuki Kitano; Additional reporting by Winni
Zhou and John Ruwitch in SHANGHAI; Editing by Richard Borsuk)

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