September 28, 2016 / 6:01 AM / in 2 years

EM ASIA FX-Europe banking woes dent Asia FX appetites; rupiah, won firm

* Rupiah at 17-month high on tax amnesty-linked inflows
    * Won near 3-week peak on exporters
    * Ringgit hits 1-week low on oil, importers' dollar demand

 (Adds text, updates prices)
    By Jongwoo Cheon
    SINGAPORE, Sept 28 (Reuters) - Emerging Asian currencies
were mixed on Wednesday in subdued trading as concerns over the
European banking sector hurt risk sentiment.
    Indonesia's rupiah hit a 17-month peak on inflows
linked to the tax amnesty programme. The South Korean won
 touched a near three-week peak on sporadic exporters'
demand for month-end settlements.
    By contrast, the Malaysian ringgit fell to a
one-week low as overnight losses in crude prices sustained
concerns about the country's oil and gas revenue.
    Asian equity markets edged down amid angst about the
European financial sector. Deutsche Bank shares hit a
record low on Tuesday, a day after Germany's biggest lender said
it had no need for German government help with a $14 billion
U.S. demand to settle claims it missold mortgage-backed
securities. 
    "Worries about European banks raised caution over further
gains in risky assets," said Jeong My-young, Samsung Futures
research head in Seoul.
    "The recent improvement in China's economy may support Asian
currencies, but that would help people add only tactical long
positions. Given a lack of further easings by major central
banks, it looks reckless to aggressively build up bullish bets,"
Jeong added.
    Profits in China's industrial sector rose at the fastest
pace in three years as the world's second-largest economy showed
more stabilisation signs, although some private forecasters say
the improvement may be more fleeting than real. 
    
    RUPIAH
    The rupiah gained 0.3 percent to 12,915 per dollar, its
strongest since April 2015.
    Indonesia sold 14 trillion rupiah ($1.1 billion) of bonds at
an auction on Tuesday, above the indicative target of 12
trillion rupiah, providing further support on the rupiah.
 
    The domestic money market also stayed tight on quarter- and
month-end flows, making bearish bets on the currency expensive,
although the market eased a bit. The overnight Jakarta Interbank
Offered Rate slid to 5.0 percent from 5.5 percent, a
three-month peak.
    The rupiah pared some of its earlier gains as the central
bank was suspected of intervening around the session high to
stem further appreciation, traders said.
    
    RINGGIT
    The ringgit slid as much as 0.5 percent to 4.1425 per
dollar, its weakest since Sept. 21.
    Crude futures lost about 3 percent on Tuesday after Iran
rejected an offer from Saudi Arabia to limit its oil output in
exchange for Riyadh cutting supply. That dented hopes the two
major OPEC producers would find a compromise this week to help
ease a global glut of crude. 
    The Malaysian currency came under further pressure on
month-end corporate dollar demand, traders said.
    A senior Malaysian bank trader in Kuala Lumpur said the
ringgit could weaken to 4.17 level touched on June 2, its lowest
since March 1, given importers' demand and broad strength in the
dollar.
    The greenback held firm against a basket of six major
currencies on concerns over the European banking sector.
    
    CURRENCIES VS U.S. DOLLAR
    Change on the day at 0550 GMT
  Currency               Latest bid   Previous day  Pct Move
  Japan yen                  100.57         100.43     -0.14
  Sing dlr                   1.3598         1.3598      0.00
 *Taiwan dlr                 31.432         31.432      0.00
  Korean won                1095.20        1096.50     +0.12
  Baht                        34.60          34.58     -0.07
  Peso                       48.220         48.170     -0.10
  Rupiah                      12925          12950     +0.19
  Rupee                       66.47          66.48     +0.02
  Ringgit                    4.1300         4.1220     -0.19
  Yuan                       6.6703         6.6695     -0.01
                                                            
  Change so far in 2016                                     
  Currency               Latest bid  End prev year  Pct Move
  Japan yen                  100.57         120.30    +19.62
  Sing dlr                   1.3598         1.4177     +4.26
  Taiwan dlr                 31.432         33.066     +5.20
  Korean won                1095.20        1172.50     +7.06
  Baht                        34.60          36.00     +4.05
  Peso                        48.22          47.06     -2.41
  Rupiah                      12925          13785     +6.65
  Rupee                       66.47          66.15     -0.48
  Ringgit                    4.1300         4.2935     +3.96
  Yuan                       6.6703         6.4936     -2.65
  * Taiwan's financial markets are closed due to Typhoon Megi.
    

 (Reporting by Jongwoo Cheon; Editing by Richard Borsuk)
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