May 10, 2017 / 6:00 AM / 3 months ago

EM ASIA FX-Asian currencies cautious on geo-political risks

    * Investors cautious on prospects of North Korean missile
tests
    * South Korean won is the biggest decliner in the region
    * China's producer inflation 6.4 percent y/y in April,
slower than expectations

 (Adds text, updates prices)
    May 10 (Reuters) - Most Asian currencies were trading flat
with investors cautious over the prospect of more nuclear
weapons tests by North Korea and renewed political disruption in
the United States after President Donald Trump abruptly fired
FBI Director James Comey.
    Pyangyang's ambassador to Britain, Choe Il, said in an
interview with Sky News on Tuesday that North Korea was ready to
conduct a sixth nuclear test, stoking investor fears that
military tensions on the Korean Peninsula could escalate at any
time.
    "We have got bit of risk aversion coming because of
geopolitical-sabre rattling." said Stephen Innes, senior trader
at OANDA.
    The South Korean won was the worst performer hit
in the region tracking declines in local equities. The broader
index fell more than quarter of a percent.
    On Wednesday, South Korea's new President Moon Jae took the
oath of office a day after his liberal Democratic Party's
decisive victory in an election called to replace Park Geun-hye,
who was removed from office in March over a corruption scandal.

    "Moon Jae-in's presidency is positive for the market.
However, because his win has been widely expected we believe
there may be some 'sell on the news' profit-taking pressure,"
CLSA said in a note.
    News from China of slowing factory-gate prices added to the
gloom around emerging-Asia currencies. China's April producer
price inflation was 6.4 percent from a year earlier, slower than
the economist's expectations for 6.9 percent, and fall from the
previous month's 7.6 percent.
    The softer April inflation data, combined with slightly
slower growth in manufacturing activity, reinforced analysts'
views that China's economic expansion remains solid but is
starting to moderate after a surprisingly strong start to the
year.
    Some analysts said benign inflation data would give the
People's Bank of China (PBOC) more leeway to tighten policy. 
    "Policy makers may step back from the relatively
aggressive monetary policy tightening, under the backdrop of
mild inflationary pressures and weakening activity growth,"
Goldman Sachs said in a note.
     Monetary policy is not expected to be tightened in the
Philippines either, according a Reuters poll taken ahead of a 
central bank policy meeting scheduled for Thursday.
    The Philippine peso was trading flat on the day, as
were several other emerging market currencies .
    
    CURRENCIES VS U.S. DOLLAR
  Change on the day at                                       
        0525 GMT                                   
  Currency               Latest bid  Previous day    Pct Move
  Japan yen             113.770            113.98       +0.18
  Sing dlr              1.409              1.4111       +0.13
  Taiwan dlr            30.252             30.258       +0.02
  Korean won            1133.600           1131.4       -0.19
  Baht*                 34.763             34.763       +0.00
  Peso                  49.955             49.925       -0.06
  Rupiah                13350.000           13345       -0.04
  Rupee*                64.620              64.62       +0.00
  Ringgit*              4.345               4.345       +0.00
  Yuan                  6.906              6.9075       +0.03
 *Closed for market                                          
 holiday                                           
  Change so far                                              
  Currency              Latest bid   End 2016        Pct Move
  Japan yen             113.770            117.07       +2.90
  Sing dlr              1.409              1.4490       +2.82
  Taiwan dlr            30.252             32.279       +6.70
  Korean won            1133.600          1207.70       +6.54
  Baht                  34.763              35.80       +2.98
  Peso                  49.955              49.72       -0.47
  Rupiah                13350.000           13470       +0.90
  Rupee                 64.620              67.92       +5.11
  Ringgit               4.345              4.4845       +3.21
  Yuan                  6.906              6.9467       +0.59
 
 (Reporting By Patturaja Murugaboopathy in Bengaluru; Editing by
Eric Meijer)
  
 
 

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