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EM ASIA FX-Asian currencies edge higher, await Fed minutes for rate clues
February 22, 2017 / 5:02 AM / 7 months ago

EM ASIA FX-Asian currencies edge higher, await Fed minutes for rate clues

    * Won, Taiwan dollar, Indonesian rupiah edge higher
    * Dollar-selling by local exporters bolsters won
    * Near-term focus on Fed minutes due later on Wednesday

 (Adds text, updates prices)
    By Masayuki Kitano
    SINGAPORE, Feb 22 (Reuters) - Most Asian currencies were
steady to firmer on Wednesday, as investors awaited the minutes
of the Fed's latest meeting for hints on the timing and pace of
possible U.S. interest rate increases.
    Dollar-selling by local exporters helped give a lift to the
South Korean won, which rose 0.4 percent against the
greenback.
    The Taiwan dollar and a few other Asian currencies
including the Indonesian rupiah also inched higher.
    Analysts said the firm tone of regional equities coupled
with the U.S. dollar's pullback from a six-day high set
against a basket of major currencies on Tuesday helped lend
support to Asian currencies.
    There was also some focus on the news that U.S. Treasury
Secretary Steven Mnuchin had told International Monetary Fund
Managing Director Christine Lagarde on Tuesday that he expects
the IMF to provide a "frank and candid" analysis of exchange
rate policies.    
    "Overall, we see North Asian (currencies) outperforming
partly due to the uncertain U.S. trade policy, as no one wants
to be in the crosshairs at the current juncture," said Andy Ji,
Asia currency strategist for Commonwealth Bank of Australia.
    The rationale is that South Korean and Taiwanese authorities
may be more cautious than usual about conducting dollar-buying
currency intervention as that could raise the risk of them being
labelled currency manipulators by the United States, Ji said.
    In late January, U.S. President Donald Trump had accused
Japan and China of engaging in devaluing their currencies, while
trade adviser Peter Navarro said Germany was using a "grossly
undervalued" euro to gain an advantage.

    That has stirred concerns that the currency policies of
Asian economies with large trade surpluses could face increased
scrutiny from the United States.
    In the near-term, Asian currencies could take their cues
from the minutes of the Fed's Jan. 31-Feb. 1 policy meeting, due
later on Wednesday.
    The focus will be on the Fed's economic assessment in the
minutes, which should emphasise a recent uptick in economic
data, although the market may still remain sceptical about the
chances of a near-term Fed rate hike, said Christopher Wong,
senior FX strategist for May bank.
    "Markets are likely to second-guess how convinced and
cohesive the FOMC members are in terms of raising (interest
rates) soon," Wong said.    
    "In our opinion, the March meeting remains a live one," he
said, adding that there was a risk that the Fed could catch the
market off guard if the market remains complacent about the
chances of a near-term rise in U.S. interest rates.  
    
    CURRENCIES VS U.S. DOLLAR  
  Change on the day at   0436 GMT                        
  Currency                Latest bid   Previous  Pct Move
                                            day  
  Japan yen                   113.41     113.66     +0.22
  Sing dlr                    1.4190     1.4205     +0.11
  Taiwan dlr                  30.762     30.793     +0.10
  Korean won                 1141.10    1146.10     +0.44
  Baht                         35.01      35.03     +0.05
  Peso                        50.270     50.250     -0.04
  Rupiah                       13356      13370     +0.10
  Rupee                        66.88      66.93     +0.07
  Ring                        4.4540     4.4555     +0.03
  Yuan                        6.8795     6.8810     +0.02
                                                         
  Change so                                              
 far in 2017                                     
  Currency                Latest bid        End  Pct Move
                                         prevue  
                                           year  
  Japan yen                   113.41     117.07     +3.23
  Sing dlr                    1.4190     1.4490     +2.11
  Taiwan dlr                  30.762     32.279     +4.93
  Korean won                 1141.10    1207.70     +5.84
  Baht                         35.01      35.80     +2.27
  Peso                         50.27      49.72     -1.09
  Rupiah                       13356      13470     +0.85
  Rupee                        66.88      67.92     +1.56
  Ring                        4.4540     4.4845     +0.68
  Yuan                        6.8795     6.9467     +0.98
  

 (Reporting by Masayuki Kitano; Additional reporting by Dahee
Kim in Seoul, Reuters FX analyst Ewen Chew; Editing by Kim
Coghill)
  
 
 

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