(Adds text, updates prices)
By Anusha Ravindranath
April 27 Most emerging Asian currencies weakened
on Thursday as risk sentiment remained fragile after
much-awaited tax reform plans from U.S. President Donal Trump
did not boost investor confidence as expected.
Traders were also wary ahead of the European Central Bank's
policy meeting later in the day.
Trump's proposal to slash tax rates for businesses and on
overseas corporate profits returned to the U.S. didn't excite
the markets, as it failed to offer details on how it would be
paid for without increasing the country's deficit.
Emerging Asian currencies took cues from weakness in broader
Asian equities, which pulled back from a near two-year
"Risk-on environment lately has caused most Asian FX to
rally but I think the rally is overdone as global risks remain
clearly high in both economic and political areas." said Amy
Yuan Zhuang, Nordea Markets’ Chief Asia Analyst.
"The tax plan announced yesterday works once again as a
wake-up call for the market that the U.S. economic boom may not
happen just yet," Zhuang said.
"I don't think this is a game changer for risk reversal, but
it definitely kills some of the animal spirit we have seen."
Meanwhile, investors will be looking to the ECB's meeting
for any clues on whether it will start to pare monetary stimulus
in the coming months.
"We don't expect any moves from ECB today, but of course,
any underlying change of tones reg the tapering will be negative
for Asian FX, in terms of expectation of tighter liquidity" Amy
The South Korean won led losses among emerging
Asian currencies, breaking a six-day winning streak. The Thai
baht weakened to its lowest in two weeks.
The Philippine peso fell to a near three-week low
while the Taiwan dollar pulled back from a two-and-a-half year
high hit in the previous session and was steady against the
dollar at 0405 GMT.
The Indian rupee retreated from a twenty-month high
hit on Wednesday.
The South Korean won was the worst performer, losing as much
as 0.6 percent against the dollar, even after the country raised
its export outlook this year on the back of stronger than
expected quarterly gross domestic product data.
South Korea and the United States agreed on Thursday to take
"swift punitive measures" against North Korea in the event of
The country has been facing a number of challenges on the
political front with recent one being the renewed tension in the
In the backdrop of existing political tensions, South Korea
is set to elect its new president in May following the
impeachment of ex-leader Park Geun-hye.
The won has appreciated around 6.8 percent against U.S.
dollar this year.
The following table shows rates for Asian currencies against the
dollar at 0508 GMT.
CURRENCIES VS U.S. DOLLAR
Currency Latest Previous Pct
bid day Move
Japan yen 111.220 111.03 -0.17
Sing dlr 1.396 1.3956 +0.01
Taiwan dlr 30.127 30.151 +0.08
Korean won 1130.80 1125.1 -0.50
Baht 34.500 34.44 -0.17
Peso 49.870 49.78 -0.18
Rupiah 13295.0 13283 -0.09
Rupee 64.090 64.12 +0.04
Ringgit 4.343 4.346 +0.07
Yuan 6.896 6.8927 -0.04
Change so far
Currency Latest End 2016 Pct
Japan yen 111.220 117.07 +5.26
Sing dlr 1.396 1.4490 +3.83
Taiwan dlr 30.127 32.279 +7.14
Korean won 1130.80 1207.70 +6.80
Baht 34.500 35.80 +3.77
Peso 49.870 49.72 -0.30
Rupiah 13295.0 13470 +1.32
Rupee 64.090 67.92 +5.98
Ringgit 4.343 4.4845 +3.26
Yuan 6.896 6.9467 +0.74
(Reporting by Anusha Ravindranath in Bengaluru; Editing by Kim