April 24, 2017 / 5:44 AM / 3 months ago

EM ASIA FX- Asian currencies firm as worries ebb over French elections

5 Min Read

 (Adds details, updates prices)
    By Anusha Ravindranath
    April 24 (Reuters) - Most Asian currencies rose on Monday as
risks over an anti-establisment shock in the French elections
subsided while the South Korean won recovered after slipping on
worries that North Korea could conduct another missile or
nuclear test.
    Uncertainties surrounding the French vote dissipated with
traders starting to look past the global risk event after
Centrist Emmanuel Macron, a pro-EU and former economy minister
won the first round of voting and qualified for the May 7 runoff
alongside far-right leader Marine Le Pen.
    Investors' greatest worry had been that France might be left
with two radical candidates who could threaten the future of the
EU, after far-left, eurosceptic Jean-Luc Melenchon, was seen
moving ahead in the polls in recent weeks.
    "I think the outcome for the first round of the French
election tells you that polls are more predictable than the
Brexit referendum and the U.S. elections last year," said Philip
Wee, senior currency economist for DBS Bank.
    "Asia ex-Japan currencies have been doing better than major
currencies this year because of the cyclical recovery story.
Unlike the U.S., they don't have to deliver on Trump's stimulus
promises. Unlike Europe, they don't have elections to worry
about," he added.
    The dollar index which tracks the U.S. currency
against a basket of six rivals fell, but its losses were
mitigated as the perceived safe-haven yen slipped.
    Market focus is turning to a slew of data from the United
States this week for clarity on the Federal Reserve's interest
rate policy.          
    The Fed may start to talk up the odds of a June rate hike if
the United States reports robust nonfarm payrolls data for
April, strengthening the dollar modestly versus emerging market
Asian currencies ahead of the June FOMC meeting, Soctiabank said
in a note.   
    In Asia, the Singapore dollar touched its highest
level in about a month while the Taiwan dollar rose for
a third session. The Indian rupee moved 0.2 percent
higher.
     Bucking the trend the Thai baht edged lower losing
0.3 percent despite a surge in the country's exports. The
export-dependent economy's customs-cleared exports in March were
far better than expected helped by strong demand for rubber and
computers.

    KOREAN WON 
    The South Korean won hit a more than one-week
high against the dollar in early trading on Monday before paring
gains to turn flat. However, it rose 0.2 percent again by 0530
GMT.
    Renewed tensions between North Korea and the United States
dampened sentiment.
    North Korea will mark the 85th anniversary of the foundation
of its Korean People's Army on Tuesday. It has in the past
marked important anniversaries with tests of its weapons.
    "The result of the French elections sent some EM Asian
currencies slightly higher, while hovering geopolitical tensions
on the Korean Peninsula capped the upside in Korean won," said
Gao Qi, FX Strategist at Scotiabank. 
    The won had snapped two weeks of losses on Friday after
strong exports data.    

CURRENCIES VS U.S. DOLLAR
 Change on the day at 0532 GMT
  Currency                Latest  Previous    Pct
                             bid       day   Move
  Japan yen              110.140    109.07  -0.97
  Sing dlr               1.395      1.3966  +0.13
  Taiwan dlr             30.284     30.363  +0.26
  Korean won             1132.30    1134.4  +0.19
                         0                  
  Baht                   34.370     34.259  -0.32
  Peso                   49.810      49.76  -0.10
  Rupiah                 *               *  +0.00
  Rupee                  64.498      64.61  +0.17
  Ringgit                *               *  +0.00
  Yuan                   6.888      6.8868  -0.01
                                                 
  Change so far                                  
  Currency               Latest   End 2016    Pct
                         bid                 Move
  Japan yen              110.140    117.07  +6.29
  Sing dlr               1.395      1.4490  +3.89
  Taiwan dlr             30.284     32.279  +6.59
  Korean won             1132.30   1207.70  +6.66
                         0                  
  Baht                   34.370      35.80  +4.16
  Peso                   49.810      49.72  -0.18
  Rupiah                 13316.0    13470*  +1.16
                         00*                
  Rupee                  64.498      67.92  +5.31
  Ringgit                4.398*    4.4845*  +1.97
  Yuan                   6.888      6.9467  +0.86
 *Markets in Indonesia and Malaysia are closed for a holiday.

 (Reporting by Anusha Ravindranath in Bengaluru; Editing by
Jacqueline Wong)
  
 
 

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