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EM ASIA FX-Philippine peso nears 3-mth low, most other Asian currencies tepid
June 22, 2017 / 5:47 AM / 5 months ago

EM ASIA FX-Philippine peso nears 3-mth low, most other Asian currencies tepid

 (Adds text, updates prices)
    By Shashwat Pradhan
    June 22 (Reuters) - The Philippine peso fell as
much as 0.2 percent on THursday to its lowest level in nearly
three months, ahead of a central bank meeting later in the day
at which policy was expected to remain unchanged.
    Most other emerging Asian currencies traded within a narrow
range, as oil prices struggled to claw up from a 10-month low
hit overnight on concerns over a supply glut and falling demand.
    The peso is on track for its longest streak of losses since
Nov. 2016.
    The central bank is widely expected to leave interest rates
unchanged at its policy review, with any action likely to come
after its new governor assumes his post next month.
    "The peso remains broadly stable despite some softness in
recent days. This should buy the central bank some time to
monitor inflation dynamics, and any spillover impact from the
Fed’s rate hike (last week)," Mizuho Bank said in a note.
    "The upshot is that the central bank is expected to stay put
for the time being, with any surprise on the hawkish side likely
to induce peso gains," Mizuho added.
    Sentiment also has been affected recently by fears that
Islamic State, on the backfoot in Iraq and Syria, is trying to
set up a stronghold in the Muslim south of the mainly Roman
Catholic Philippines that could threaten the whole
    The peso has been among the worst performerming currencies
in Asia this year, slipping more than 1 percent against the
   For emerging currencies in general, a lingering worry has
been the recent strengthening of the dollar, which held steady
below a one-month high against a basket of currencies on
Thursday on bets that the U.S. central bank will increase rates
once more later this year.
    The U.S. dollar held steady against a basket of six
major currencies, having retreated marginally from a one-month
high of 97.871 set earlier during the week.
    Risk sentiment among Asian currencies was also affected by
oil prices, which ended down more than 2 percent on Wednesday
after hitting a 10-month low in volatile trade, as growing U.S.
production and reduced Chinese refinery activity fed mounting
concern over the stubborn global crude glut.
    "The risk of oil price declines entrenching low inflation
expectations has increased starkly, and could possibly throw a
spanner in the Fed's policy tightening plans," said Mizuho Bank
in a note.
    Overall, regional currencies were mixed, though most had
small spikes.
    The Korean won was among the top gainers,
climbing as much as 0.5 percent against the dollar after seeing
some support from local exporters.
    The Tawain dollar edged up after local stocks rose
to their highest in 27 years, buoyed by technology shares.
    The yuan weakened marginally against the dollar
after the central bank fixed its official midpoint at a fresh
three-week low, while corporate demand for the greenback also
weighed on the Chinese currency.
    "We stay vigilant on a wide gap between onshore spot and
fixing. If the dollar weakens broadly, the elevated spot-fixing
spread will spur a selloff in the dollar as what happened in
late May," said Qi Gao, FX Strategist at Scotiabank.
    The Indian rupee was little changed against the
dollar after minutes from Reserve Bank of India's (RBI) last
meeting showed it wants more evidence that inflation has
sustainably fallen below its target before deciding whether to
lower interest rates.
    The following table shows rates for Asian currencies against
the dollar at 0532 GMT.
  Currency                 Latest bid  Previous day   Pct Move
  Japan yen               111.070            111.37      +0.27
  Sing dlr                1.389              1.3890      -0.01
  Taiwan dlr              30.450             30.471      +0.07
  Korean won              1141.700             1144      +0.20
  Baht                    33.970              33.98      +0.03
  Peso                    50.320              50.29      -0.06
  Rupiah                  13320.000           13317      -0.02
  Rupee                   64.470              64.52      +0.08
  Ringgit                 4.285               4.286      +0.04
  Yuan                    6.832              6.8299      -0.02
  Change so far in 2017                                       
  Currency                Latest bid   End 2016       Pct Move
  Japan yen               111.070            117.07      +5.40
  Sing dlr                1.389              1.4490      +4.31
  Taiwan dlr              30.450             32.279      +6.01
  Korean won              1141.700          1207.70      +5.78
  Baht                    33.970              35.80      +5.39
  Peso                    50.320              49.72      -1.19
  Rupiah                  13320.000           13470      +1.13
  Rupee                   64.470              67.92      +5.35
  Ringgit                 4.285              4.4845      +4.67
  Yuan                    6.832              6.9467      +1.68

 (Reporting By Shashwat Pradhan in Bengaluru; Editing by Kim

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