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Asian currencies subdued; shrug off North Korea missile test
May 29, 2017 / 6:39 AM / 6 months ago

Asian currencies subdued; shrug off North Korea missile test

REUTERS - Asian currencies paled against a stronger U.S. dollar on Monday, with markets little fazed by a ballistic missile test by North Korea, but trading was subdued as key financial markets were closed.

FILE PHOTO: South Korean 10,000 won note is seen on U.S. 100 dollar notes in this picture illustration taken in Seoul, South Korea, December 15, 2015. REUTERS/Kim Hong-Ji/File Photo

The dollar index was up about 0.03 percent against a basket of currencies, extending Friday’s rally when it hit a one-week high on positively revised U.S. gross domestic product data.

The U.S. economy slowed less than initially thought in the first quarter, with gross domestic product increasing at a 1.2 percent annual rate, the Commerce Department said on Friday in its second GDP estimate for the quarter.

“We can see some declines in other currencies, which is possibly due to a firm dollar index after last Friday,” said Gao Qi, an FX Strategist at Scotiabank.

Earlier in the session, North Korea fired about one short-range ballistic missile that landed in the sea off its east coast, the latest following two successful tests of medium-to long range missiles in defiance of world pressure and threats of more sanctions.

“I think the impact from the launch is muted, quite limited,” Gao Qi added. “You can see that the Korean won rebounded slightly.”

Investors are also awaiting China’s official factory activity data, due on Wednesday, which is expected to show the slowest pace of growth in eight months, according to a poll by Reuters.

Analysts expect China’s overall economic growth to slow gradually over the rest of the year, as authorities tighten regulations to deter riskier lending and as the impact of earlier stimulus measures begins to fade.

The Singapore dollar was down about 0.2 percent against the dollar, its biggest percentage loss in nearly a week.

It had gained about 0.4 percent in the previous session after data showed the island state’s manufacturing output in April rose 6.7 percent from a year earlier.

The Thai baht fell as much as 0.27 percent in its biggest percentage loss in nearly 3 weeks. The currency rallied about 0.6 percent on Friday.

The yuan and the Taiwan Dollar did not trade on account of domestic holidays.

S.KOREAN WON

The Korean won rose as much as 0.2 percent on Monday after having added about 0.6 percent last week on the back of strong inflows.

South Korean shares rallied for a seventh day to mark another intraday record, tracking Wall Street’s performance on Friday.

U.S. markets were closed for a public holiday.

While Korean assets are being underpinned by continued inflows, analysts believe month-end dollar selling is helping the won rebound, albeit slightly.

CURRENCIES VS U.S. DOLLAR

Change on the day at   0553 GMT

Currency Latest bid Previous day Pct

Move

Japan yen 111.300 111.31 +0.01

Sing dlr 1.384 1.3815 -0.21

Korean won 1120.400 1120.7 +0.03

Baht 34.083 34.018 -0.19

Peso 49.770 49.75 -0.04

Rupiah 13313.000 13294 -0.14

Rupee 64.570 64.44 -0.20

Ringgit 4.267 4.267 +0.00

Change so far

Currency Latest bid End 2016 Pct

Move

Japan yen 111.300 117.07 +5.18

Sing dlr 1.384 1.4490 +4.67

Korean won 1120.400 1207.70 +7.79

Baht 34.083 35.80 +5.04

Peso 49.770 49.72 -0.10

Rupiah 13313.000 13470 +1.18

Rupee 64.570 67.92 +5.19

Ringgit 4.267 4.4845 +5.10

Reporting by Ambar Warrick in Bengaluru; Editing by Kim Coghill

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