February 24, 2017 / 6:30 AM / 5 months ago

EM ASIA FX-Won scales 4-month high, most Asia FX poised for weekly gains

5 Min Read

    * Won hits 4-month high, Singapore dollar sets 3-month high
    * Most Asian currencies edge higher vs dollar
    * Investors await details on U.S. tax reform plans

    SINGAPORE, Feb 24 (Reuters) - Asian currencies edged higher
on Friday, with the South Korean won hitting a four-month high,
as uncertainty over details of the Trump administration's tax
reform plan weighed on the dollar.
    The Chinese yuan edged up 0.1 percent against the
greenback, showing limited reaction to U.S. President Donald
Trump's comments to Reuters on Thursday declaring China "the
grand champions" of currency manipulation.
    The South Korean won rose to 1,127.6 per dollar
at one point, its strongest level since Oct. 20. The won was
last up 0.7 percent on the day.
    With its latest gains, the won joins the Taiwan dollar as
being the currencies in Asia trading higher than the levels seen
on Nov. 9, after Donald Trump's win in the U.S. presidential
elections.
    Most other Asian currencies were slightly higher on the day,
with the Taiwan dollar and Indonesian rupiah
gaining 0.2 percent each.
    The Singapore dollar set a high of 1.4041 per U.S. dollar at
one point, its highest level since Nov. 10.
    Asian currencies held firm after the greenback slipped
against a basket of six major currencies on Thursday. 
    The dollar faltered after U.S. Treasury Secretary Steven
Mnuchin, in his first televised interview since taking office,
offered few fresh details on the administration's tax reform
plans.
    Mnuchin told Fox Business Network that any policy steps the
Trump administration takes would likely have a limited impact
this year and told CNBC that he wanted to see tax reform passed
before Congress' August recess.
    Mnuchin's comments left analysts wondering whether details
of the tax reform plan would be unveiled when President Donald
Trump addresses a joint session of Congress on Feb. 28.
    "Expectation is that Trump will at least provide some more
details on the tax cuts and that's supposed to strengthen the
dollar and make yields rise," said Sean Yokota, head of Asia
strategy for Scandinavian bank SEB in Singapore.
    "So what he's (Mnuchin) saying yesterday is clearly setting
expectations lower going into it," Yokota said. More details of
the tax plans could still emerge in the next few days, however,
and trigger fluctuations in currencies, he added.
    Worries about political risks in Europe could weigh on
emerging Asian currencies going forward, analysts said.
    Markets have been concerned about anti-European Union
rhetoric from French presidential candidate Marine Le Pen ahead
of the first round of elections on April 23, with the second
round to come in May.
    "It's not a situation where you can actively buy Asian
currencies, although it's hard to tell whether the risk is from
the possibility of dollar strength, or from risks related to
Europe," said Teppei Ino, an analyst for Bank of
Tokyo-Mitsubishi UFJ in Singapore.
    Most Asian currencies were poised to see weekly gains,
supported by expectations that the Federal Reserve would
probably wait until the second quarter to raise interest rates,
rather than increase them in March.
      
    CURRENCIES VS U.S. DOLLAR  
  Change on the day at   0535 GMT                      
  Currency                Latest bid   Previous     Pct
                                            day    Move
  Japan yen                   112.88     112.63   -0.22
  Sing dlr                    1.4059     1.4064   +0.04
  Taiwan dlr                  30.675     30.745   +0.23
  Korean won                 1129.40    1137.30   +0.70
  Baht                         34.96      34.98   +0.07
  Peso                        50.175     50.225   +0.10
  Rupiah                       13330      13350   +0.15
  Rupee                        66.83      66.82   -0.01
  Ringgit                     4.4440     4.4470   +0.07
  Yuan                        6.8704     6.8735   +0.05
                                                       
  Change so                                            
 far in 2017                                     
  Currency                Latest bid   End prev     Pct
                                           year    Move
  Japan yen                   112.88     117.07   +3.71
  Sing dlr                    1.4059     1.4490   +3.07
  Taiwan dlr                  30.675     32.279   +5.23
  Korean won                 1129.40    1207.70   +6.93
  Baht                         34.96      35.80   +2.43
  Peso                         50.18      49.72   -0.91
  Rupiah                       13330      13470   +1.05
  Rupee                        66.83      67.92   +1.64
  Ringgit                     4.4440     4.4845   +0.91
  Yuan                        6.8704     6.9467   +1.11
 
 (Reporting by Masayuki Kitano in Singapore; Additional
reporting by Reuters FX analyst Krishna Kumar; Editing by
Gopakumar Warrier)
  
 
 

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