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EM ASIA FX-Asian currencies nudge lower on hawkish Fed; Philippine peso climbs
May 4, 2017 / 6:09 AM / 5 months ago

EM ASIA FX-Asian currencies nudge lower on hawkish Fed; Philippine peso climbs

 (Adds text, updates prices)
    By Shashwat Pradhan
    May 4 (Reuters) - Most Asian currencies fell modestly on
Thursday as the dollar retained gains made after the U.S.
Federal Reserve's hawkish policy statement.
    At the end of its two-day meeting, the Fed kept its
benchmark interest rate steady, as expected, but downplayed weak
first-quarter economic growth and emphasised the strength of the
labour market, a sign it was still on track for two more rate
increases this year.
    The central bank also said consumer spending continued to be
solid, business investment had firmed and inflation has been
"running close" to the Fed's target.
    "The Federal Open Market Committee did not give any explicit
cues on what they are likely to do next but the statement that
accompanied the decision (to stand pat) was clearly confident of
the U.S. growth trajectory and its economic fundamentals,"
Maybank said in a note.
    The dollar index, which tracks the greenback against
a basket of trade-weighted peers, climbed 0.1 percent, building
on Wednesday's 0.2 percent jump.
    Sentiment across Asian currencies was also affected by a
survey showing growth in China's services sector had cooled to
its slowest in almost a year in April as fears of slower
economic growth dented business confidence.
    The yen fell 0.1 percent against the dollar to its
weakest level in more than six weeks.
    Among other currencies, the Indonesia rupiah slipped
marginally after two days of gains.
    On Wednesday, an Indonesian cabinet minister said the
government will delay all planned price increases until after
the Muslim festival of Eid al-Fitr this year, to help control
inflation.
    The country's annual inflation rose to a 13-month high in
April, mainly due to increasing electricity tariffs, the
statistics bureau said on Tuesday.
    
    MALAYSIAN RINGGIT
    The Malaysian ringgit edged lower on Thursday after
six straight days of gains against the dollar.
    Economists surveyed by Reuters forecast Malaysia's exports
in March would grow 19.2 percent from a year earlier, down from
26.5 percent growth in February.
    Sentiment was also dented by the lapse of a deal by a former
unit of troubled state fund 1Malaysia Development Berhad (1MDB)
to sell its stake in a project to a consortium including China's
state-owned China Railway Engineering Corp.
    "This (lapse of the deal) raises doubts whether 1MDB would
be able to continue with its deleveraging plans, and could be
perceived negatively by ringgit investors," Mizuho said in a
note.
    
    CHINESE YUAN
    The Chinese yuan inched up against the dollar on
Thursday after the country's forex regulator said China will
step up its crackdown on illegal foreign exchange deals this
year.
    The State Administration of Foreign Exchange (SAFE) said in
it would "strengthen authenticity and compliance checks on trade
and investment, intensify checks and punishment of illegal
foreign exchange activities".
    The yuan has stabilised this year, due to curbs on capital
outflows and a reversal of the dollar rally, following a fall of
6.5 percent in 2016. 
    Still, the currency is expected to weaken over the coming
year, a Reuters poll found, with the dollar supported by U.S.
interest rate hikes.
    
    PHILIPPINE PESO
    The Philippine peso gained 0.2 percent against
the dollar on Thursday, bucking the trend across most Asian
currencies.
    The currency tracked strength in local equities, which rose
to a more than seven-month high, driven by gains in the mining
sector.
    Philippine mining stocks rallied after lawmakers ended a
10-month crusade by Environment Secretary Regina Lopez on
Wednesday, forcing out the environmentalist whose mining
crackdown was backed by the president but led to demands for her
removal by miners.
    Lopez had ordered the closure of more than half of the mines
in the world's top nickel ore supplier and last week banned
open-pit mining.
    
    The following table shows rates for Asian currencies against
the dollar at 0552 GMT.
    
    CURRENCIES VS U.S. DOLLAR
    
  Currency               Latest bid  Previous day  Pct Move
  Japan yen              112.790           112.73     -0.05
  Sing dlr               1.397             1.3972     -0.01
  Taiwan dlr             30.099            30.072     -0.09
  Korean won             1131.300          1130.5     -0.07
  Baht                   34.570             34.47     -0.29
  Peso                   49.860             49.95     +0.18
  Rupiah                 13322.000          13303     -0.14
  Rupee                  64.205             64.15     -0.09
  Ringgit                4.323              4.317     -0.14
  Yuan                   6.897             6.8985     +0.03
                                                           
  Change so far                                            
  Currency               Latest bid  End 2016      Pct Move
  Japan yen              112.790           117.07     +3.79
  Sing dlr               1.397             1.4490     +3.70
  Taiwan dlr             30.099            32.279     +7.24
  Korean won             1131.300         1207.70     +6.75
  Baht                   34.570             35.80     +3.56
  Peso                   49.860             49.72     -0.28
  Rupiah                 13322.000          13470     +1.11
  Rupee                  64.205             67.92     +5.79
  Ringgit                4.323             4.4845     +3.74
  Yuan                   6.897             6.9467     +0.73
 

 (Reporting By Shashwat Pradhan in Bengaluru; Editing by Sam
Holmes)
  
 
 

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