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EM ASIA FX-Asia currencies slip on Fed rate hike bets, but inflows support
March 2, 2017 / 5:47 AM / 9 months ago

EM ASIA FX-Asia currencies slip on Fed rate hike bets, but inflows support

    * Asian currencies fall on expectations of Fed hike in March
    * A few pare losses on risk taking by investors

 (Adds text, updates prices)
    BENGALURU/SINGAPORE, March 2 (Reuters) - Asian currencies
slipped on Thursday as the dollar rose on  expectations of a
Federal Reserve rate hike in March, although  some pared their
losses on risk taking by investors.
    The South Korean won fell more than one percent at one point
but later trimmed losses, underpinned by strong inflows in
    The Singapore dollar and the Taiwan dollar
also pared some losses suffered earlier in the day.  
    "There is some bounce due to inflows into the (Asian
equities) market. But this week, it is mostly about U.S. dollar
moves which are driven by expectations of a rate hike in March,"
said Andy Ji, a currency strategist at Commonwealth Bank of
    The expectations of a March rate hike received a further
boost from Federal Reserve Governor Lael Brainard on Wednesday
who said an improving global economy and a solid U.S. recovery
mean it will be "appropriate soon" for the Fed to raise rates.
    While a U.S. rate hike is expected to result in foreign
outflows from Asian markets, analysts said a strong U.S. economy
was good for Asia as it would benefit their exports.
    "I think there are two opposite forces here: on one side,
Fed hike would trigger capital outflows and hurt Asian FX but on
the other side, signs of a sustainably stronger U.S. economy is
positive for Asia, at least until Trump's trade policy becomes
clear," said Amy Yuan Zhuang, Nordea Markets' chief analyst.
    Analysts said the market would be focusing on Fed Chair
Janet Yellen's speech due on Friday, as well as U.S. jobs data
on March 10, for further hints on the chances of a Fed rate hike
at its policy meeting on March 14-15.

    The Taiwan dollar fell 0.1 percent to 30.8 per
dollar, but still hovered near a 20-month high of 30.65 reached
last Friday.
    The Taiwan dollar is Asia's second-biggest gainer with a
near 5-percent increase this year on the back of strong capital
inflows. In the first two months of this year, foreign investors
have put more than $3 billion in Taiwan equities, according to
exchange data. 
    Taiwan's central bank governor said on Thursday the U.S.
government is unlikely to label the country as a currency
manipulator under the existing criteria used by the U.S.
Treasury to assess currency policies of its trading partners.

  Change on the day at   0457 GMT                      
  Currency               Latest bid   Previous      Pct
                                           day     Move
  Japan yen                  113.98     113.73    -0.22
  Sing dlr                   1.4108     1.4090    -0.13
  Taiwan dlr                 30.793     30.760    -0.11
  Korean won                1143.40    1130.70    -1.11
  Baht                        34.99      34.97    -0.07
  Peso                       50.315     50.280    -0.07
  Rupiah                      13362      13361    -0.01
  Rupee                       66.73      66.82    +0.14
  Ringgit                    4.4480     4.4455    -0.06
  Yuan                       6.8842     6.8824    -0.03
  Change so far                                        
 in 2017                                        
  Currency               Latest bid   End prev      Pct
                                          year     Move
  Japan yen                  113.98     117.07    +2.71
  Sing dlr                   1.4108     1.4490    +2.71
  Taiwan dlr                 30.793     32.279    +4.83
  Korean won                1143.40    1207.70    +5.62
  Baht                        34.99      35.80    +2.31
  Peso                        50.32      49.72    -1.18
  Rupiah                      13362      13470    +0.81
  Rupee                       66.73      67.92    +1.79
  Ringgit                    4.4480     4.4845    +0.82
  Yuan                       6.8842     6.9467    +0.91
 (Reporting by Patturaja Murugaboopathy in Bengaluru and
Masayuki Kitano in Singapore; Editing by Jacqueline Wong)

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