April 26, 2017 / 5:52 AM / 4 months ago

EM ASIA FX-Taiwan dollar at 2-1/2 yr high; Indian rupee hits 20-mnth peak

 (Adds text, updates prices)
    By Anusha Ravindranath
    April 26 (Reuters) - Most emerging Asian currencies were
stronger on Wednesday with the Taiwan dollar at a two-and-a-half
year high, spurred by persistent foreign inflows, while the
Indian rupee climbed to a 20-month peak, buoyed by a local stock
market rally.
    The Taiwan dollar rose for a fifth day and was at
its strongest level against the U.S. dollar since September
2014. 
    The currency tracked the strength in local equities, which
rose mirroring an overnight rally on Wall Street and as retail
investors joined the foreign buying spree.

    The Indian rupee gained for a third straight
session and took cues from the record rally in local share
market after a host of strong domestic quarterly results and
hopes for additional foreign inflows to India boosted sentiment.
    "Even as there are likely gains in the dollar, on the
domestic front, excess rupee liquidity in the banking sector and
continuous (foreign inflows) could prevent the Reserve Bank of
India to intervene aggressively in the forex market," HDFC Bank
said in a note.
    "Therefore, the rupee could continue to trade with an
appreciation bias in the near-term." 
    Meanwhile, investors in broader Asia shifted their focus to
a major tax announcement by U.S. President Donald Trump. He is
set to unveil a tax plan on Wednesday, with markets anticipating
a sharp slash in corporate income tax rates.
    Trump's proposal to exclude the controversial
"border-adjustment" tax on imports will come as a relief for
export oriented countries such as Taiwan and South Korea.
    "If the tax reforms come as expected, it is going to be
supportive for Asian equities and we can expect a bit more
appreciation in the Asian currencies going forward, just from
the lift in risk appetite," Chang Wei Liang an FX strategist at
Mizuho Bank said.
    The dollar surged against the safe-haven yen on Tuesday as 
strong new U.S. home sales data and optimism surrounding the
expected tax reforms soothed sentiment.
    The Japanese central bank announces the outcome of its
monetary policy meeting on Thursday and is expected to keep its
policy settings steady.
    
    MALAYSIAN RINGGIT 
    The ringgit rose for a second day to a five-month
peak.
    Mizuho's Chang said the ringgit is benefiting from the
recently announced liberalisation of its onshore markets, which
helps address foreign investor concerns about managing their
risk exposure in that market. 
    "We believe that (announcement) could potentially revive
inflows into Malaysia," he said.
    Recently, Bank Negara unveiled plans to ease the hedging
rules in the onshore foreign exchange (forex) and bond markets
in Malaysia. (bit.ly/2q5rNEi)(bit.ly/2pk2jm3)

The following table shows rates for Asian currencies against the
dollar at 0527 GMT.
CURRENCIES VS U.S. DOLLAR
  Currency                Latest  Previous    Pct
                             bid       day   Move
  Japan yen              111.380    111.08  -0.27
  Sing dlr               1.392      1.3934  +0.08
  Taiwan dlr             30.019     30.152  +0.44
  Korean won             1123.40    1125.4  +0.18
                         0                  
  Baht                   34.403      34.38  -0.07
  Peso                   49.655     49.675  +0.04
  Rupiah                 13275.0     13275  +0.00
                         00                 
  Rupee                  63.990      64.26  +0.42
  Ringgit                4.352       4.369  +0.39
  Yuan                   6.886      6.8851  -0.01
                                                 
  Change so far                                  
  Currency               Latest   End 2016    Pct
                         bid                 Move
  Japan yen              111.380    117.07  +5.11
  Sing dlr               1.392      1.4490  +4.07
  Taiwan dlr             30.019     32.279  +7.53
  Korean won             1123.40   1207.70  +7.50
                         0                  
  Baht                   34.403      35.80  +4.06
  Peso                   49.655      49.72  +0.13
  Rupiah                 13275.0     13470  +1.47
                         00                 
  Rupee                  63.990      67.92  +6.14
  Ringgit                4.352      4.4845  +3.04
  Yuan                   6.886      6.9467  +0.89
 

 (Reporting by Anusha Ravindranath in Bengaluru; Editing by Sam
Holmes)
  
 
 

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