May 8, 2017 / 7:31 AM / 2 months ago

EM ASIA FX-Asian currencies rise on French election relief

6 Min Read

    * Asian currencies rise on Emmanuel Macron's victory in
French elections
    * Indian rupee is the top gainer on surging domestic
equities
    * China's yuan is likely to appreciate in the next 2-3
months- analyst
    * South Korean won positive ahead of presidential elections
on Tuesday

 (Adds text, updates prices)
    By Patturaja  Murugaboopathy 
    May 8 (Reuters) - Asian currencies edged up on Monday as
markets breathed a sigh of relief after centrist Emmanuel Macron
was elected French President following a resounding victory over
far-right Marine Le Pen, who had threatened to take France out
of the European Union. 
    The resulting bounce in risk appetite boosted Asian shares
 by over half a percent and crude oil by more
than 1 percent.
    Macron's win put to bed fears of another populist upheaval
after Britain's vote to exit the European Union last year spread
turmoil in global markets.
    Elections were very much the focus in South Korea too, with
the won up a touch ahead of Tuesday's presidential
vote in which leading liberal candidate Moon Jae-in likely to
emerge victorious.
    Moon, the son of North Korean refugees who came to the South
during the 1950-53 Korean War, would end nine years of
conservative rule in Seoul if elected, a time when Pyongyang
stepped up its nuclear and missile tests
    The Indian rupee led the gainers in the region
thanks to strong equity markets, in a sign foreign investors
were returning after turning net sellers last week.
    The Indonesian rupiah was trading flat after the Bank
Indonesia's chief said the central bank has been intervening in
the foreign exchange market to curb strong rupiah appreciation.
The rupiah, which climbed 2 percent this year up until
mid-April, has lost about half a percent since then.
    In the United States, fresh data suggested the Federal
Reserve is on course for a June rate hike, but pressure on
regional currencies could be limited as markets are more or less
priced in for a Fed move.
     Friday's U.S. jobs data showed a sharp rebound in April
that pointed to a tightening labor market.
    "Fed rate hike for June is almost 100 percent priced in.
Hence dollar movement can be limited against Asian currencies."
said Sean Yokota, head of Asia strategy at Skandinaviska
Enskilda Banken.
    
    CHINA'S YUAN
    
    China's yuan was trading flat against the dollar,
but the reaction was limited to official data showing April's
exports data missed market expectations.
    However, some analysts were bullish on the yuan, with the
10-year treasury yield < CN10YT=RR> touching the highest level
in nearly two years on Monday in the wake of Beijing's
stepped-up campaign to reduce leverage and ward off risks in the
financial system. 
   "People should go long on CNH over the next two months.   
The impact of leverage is to cool than crush the market." said
Yokota, who expects CNH to trade at 6.82 levels in two to three
months time. The offshore yuan was currently trading at
6.9030 per dollar.
    The official data also showed China's foreign exchange
reserves rose in April for a third straight month which
indicated China could afford to support the yuan to discourage
bearish-yuan bets that might spur capital outflows.
    
    SOUTH KOREAN WON
    
    The South Korean won was up 0.14 percent against
the dollar ahead of the presidential election on Tuesday.
     The elections results are expected to bring some political
certainty after former president Park Geun-hye was ousted in
March over corruption charges.
    "Regardless the final results, this election is viewed
positively by investors as it is widely expected to end the
uncertainties brought by the former President Park’s
impeachment." DBS said in a note.
    Few pre-polls show liberal candidate Moon is likely to
emerge victorious.
    Among other things, Moon advocates a removal of the US THAAD
missile defense system and re-engaging North Korea in talks,
which would appease both China and its antagonistic northern
neighbour.
    
 CURRENCIES VS U.S. DOLLAR
   Change on the day at                                        
          0631 GMT                                      
  Currency                    Latest bid  Previous day      Pct
                                                           Move
  Japan yen                  112.680            112.71    +0.03
  Sing dlr                   1.403              1.4044    +0.07
  Taiwan dlr                 30.148             30.182    +0.11
  Korean won                 1131.400           1132.7    +0.11
  Baht                       34.610              34.66    +0.14
  Peso                       49.825              49.91    +0.17
  Rupiah                     13310.000           13327    +0.13
  Rupee                      64.215              64.37    +0.24
  Ringgit                    4.332               4.335    +0.08
  Yuan                       6.902              6.9026    +0.00
                                                               
  Change so far                                                
  Currency                   Latest bid   End 2016          Pct
                                                           Move
  Japan yen                  112.680            117.07    +3.90
  Sing dlr                   1.403              1.4490    +3.25
  Taiwan dlr                 30.148             32.279    +7.07
  Korean won                 1131.400          1207.70    +6.74
  Baht                       34.610              35.80    +3.44
  Peso                       49.825              49.72    -0.21
  Rupiah                     13310.000           13470    +1.20
  Rupee                      64.215              67.92    +5.77
  Ringgit                    4.332              4.4845    +3.53
  Yuan                       6.902              6.9467    +0.64
 
     

 (Reporting By Patturaja Murugaboopathy in Bengaluru,; Editing
by Shri Navaratnam)
  
 
 

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below