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EM ASIA FX-Asian currencies benefit as Korean tensions, Fed weigh on dollar
July 5, 2017 / 4:50 AM / 5 months ago

EM ASIA FX-Asian currencies benefit as Korean tensions, Fed weigh on dollar

 (Adds text, updates prices)
    By Christina Martin
    July 5 (Reuters) - Emerging Asian currencies edged up on
Wednesday as the dollar slipped against the yen on concerns
about rising tensions between the United States and North Korea
and investors trimmed greenback positions ahead of Federal
Reserve minutes.
    North Korea said its newly developed intercontinental
ballistic missile can carry a large nuclear warhead, triggering
a call by Washington for global action to hold it accountable
for pursuing nuclear weapons.
    The Pentagon condemned the missile test and said it was
prepared to defend the United States and its allies against the
growing threat from North Korea.
    "The greenback is a little softer in early trade but
backgound nervousness, especially on the geopolitical front, may
temper near-term Asian FX resilience," said Emmanuel Ng, FX
strategist at Oversea-Chinese Banking Corporation.
    The dollar shed 0.3 percent in early trade to fetch 112.95
yen, slipping further from Monday's 1-1/2-month high of
    Investors awaited minutes of the Fed's June meeting, to be
released later in the day, to gauge how committed it was to
hiking rates gain this year and any detail on plans to wind back
its massive balance sheet.
    "The fast money is maybe just lightening up on the U.S.
dollar ahead of the (Fed) minutes," Ng said.
    Markets imply around a 60 percent chance of another rate
rise in December, and a much shallower path of future increases
than most Fed members.
    Among Asian currencies, the Chinese yuan inched
up 0.1 percent in early trade, snapping two consecutive days of
declines, while the Singapore dollar rose as much as 0.2
    The Philippine peso gained for a second straight
day on Wednesday, edging up 0.1 percent.
    Annual inflation eased for a second straight month in June
to 2.8 percent, within the central bank's forecast, due to
slower price increases in food and transport, data from the
statistics agency showed earlier on Wednesday.
    The new Philippine central bank chief said the lower
inflation reading in June provides the bank some space for
fine-tuning its monetary policy.
    On June 22, policymakers left key interest rates unchanged
and cut their forecast for inflation this year to 3.1 percent
from 3.4 percent, still within the central bank's 2-4 percent
target range.
    South Korea's won climbed 0.2 percent on
Wednesday, heading for its first session of gains in four. 
    The Korea Composite Stock Price Index (KOSPI) was up
0.1 percent at 2,382.68 points, after faltering late on Tuesday
and closing in negative territory.
    The won slumped to more than 16-week lows in the previous
session following simmering tensions on the Korean peninsula.
    South Korea's defence minister said on Wednesday he sees a
high possibility of North Korea conducting a sixth nuclear test.

    The following table shows rates for Asian currencies against
the dollar at 0423 GMT.
  Currency               Latest bid  Previous day  Pct Move
  Japan yen              113.080           113.26     +0.16
  Sing dlr               1.381             1.3825     +0.12
  Taiwan dlr             30.499            30.528     +0.10
  Korean won             1148.400          1150.6     +0.19
  Baht                   33.980             34.01     +0.09
  Peso                   50.500             50.52     +0.04
  Rupiah                 13352.000          13362     +0.07
  Rupee                  64.720             64.73     +0.02
  Ringgit                4.295              4.296     +0.02
  Yuan                   6.795             6.8005     +0.08
  Change so far in 2017                                    
  Currency               Latest bid   End 2016     Pct Move
  Japan yen              113.080           117.07     +3.53
  Sing dlr               1.381             1.4490     +4.94
  Taiwan dlr             30.499            32.279     +5.84
  Korean won             1148.400         1207.70     +5.16
  Baht                   33.980             35.80     +5.36
  Peso                   50.500             49.72     -1.54
  Rupiah                 13352.000          13470     +0.88
  Rupee                  64.720             67.92     +4.94
  Ringgit                4.295             4.4845     +4.41
  Yuan                   6.795             6.9467     +2.23

 (Reporting By Christina Martin in Bengaluru; Editing by Sam

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