April 9, 2018 / 5:27 AM / a year ago

EM ASIA FX-Mostly firm as U.S.-China trade tensions weigh on dollar

    * South Korea's won biggest advancer among emerging Asia FX
    * Indian rupee hits near 2-week high 
    * Taiwan dollar touches its lowest in four weeks 

 (Adds text, updates prices)
    By Christina Martin
    April 9 - Most emerging Asian currencies firmed on Monday,
with the dollar staying in a defensive stance on concerns over
U.S.-China trade tensions and following a report that showed the
U.S. economy created the fewest jobs in six months in March.
    The dollar index stood at 90.18 against a basket of
six major currencies, down from a one-month high of 90.597 ahead
of the U.S. non-farm payrolls on Friday.
    China warned it was fully prepared to hit back with fresh
trade measures if the U.S. follows through on President Donald
Trump's threat to slap tariffs on an additional $100 billion of
Chinese goods. 
    Combative statements from the two countries have stirred
fears of a full-blown trade war that could hurt global economic
    The U.S. payrolls report for March, which showed an increase
of just 103,000 jobs from February's surge of 326,000, also
weighed on the dollar.
    "EM Asia FX are expected to remain supported this week,
awaiting anxiously for any signs of a de-escalation in President
Xi's keynote speech at the Boao Forum," said Andy Ji, a
strategist for Commonwealth Bank of Australia in Singapore. 
    "The greater integration of China and Asia in the global
value chains renders the region's smaller economies more
vulnerable to slower global trade growth."
    Chinese President Xi Jinping will attend this month's Boao
Forum and deliver a keynote speech, unveiling new measures on
reform and opening up at the annual forum.
    Among Asian currencies, the South Korean won rose
as much as 0.4 percent, posting its biggest intraday percentage
gain in a week. 
    The Singapore dollar and the Malaysian ringgit
 both gained as much as 0.2 percent, while the Indian
rupee touched its highest in almost two weeks.
    Singapore's central bank is expected to tighten monetary
policy in April, a Reuters poll showed, but Ji said it is
"likely to stand pat due to both subdued inflation, and more
importantly, the prospect of a further escalation in the
U.S.-China trade conflict."
    Twelve of 19 analysts expect a slight increase in the
appreciation rate of the Singapore dollar's policy band from
zero percent, a "neutral" stance that the central bank has kept
for the last two years. 
    The Indonesian rupiah traded flat, while China's yuan
 inched up 0.1 percent. 
    Meanwhile, the Taiwan dollar edged down as much as 0.4
percent, hitting a four-week low, and the Thai baht
fell as much as 0.2 percent to its lowest in more than two
    Markets in Philippines were closed for a holiday. 
    The Chinese yuan crept up 0.1 percent on Monday,
while the dollar also steadied about the same, having retreated
late last week due to concerns over U.S.-China trade tensions.
    In the spot market, the onshore yuan opened at 6.3005 per
dollar and was changing hands at 6.2962 at midday, 65 pips
firmer than the previous late session close. 
    "The USD/CNY continues its steady path...While being immune
mostly to external developments, the currency is focusing on
domestic events, such as the Boao Forum this week," said Ji. 
    Sino-U.S. trade frictions have been bearish for the dollar
in recent trading sessions, but analysts expect they could hit
sentiment on the yuan harder in the longer term. 
    The following table shows rates for Asian currencies against
the dollar at 0447 GMT.
 Change on the day at 0447 GMT                    
 Currency               Latest bid  Previous day  Pct Move
 Japan yen              107.020     106.91        -0.10
 Sing dlr               1.313       1.3154        +0.18
 Taiwan dlr             29.201      29.148        -0.18
 Korean won             1066.300    1069.6        +0.31
 Baht                   31.250      31.2          -0.16
 Rupiah                 13765.000   13770         +0.04
 Rupee                  64.883      64.97         +0.13
 Ringgit                3.861       3.868         +0.18
 Yuan                   6.297       6.3027        +0.10
 Change so far in 2018                            
 Currency               Latest bid  End 2017      Pct Move
 Japan yen              107.020     112.67        +5.28
 Sing dlr               1.313       1.3373        +1.84
 Taiwan dlr             29.201      29.848        +2.22
 Korean won             1066.300    1070.50       +0.39
 Baht                   31.250      32.58         +4.26
 Rupiah                 13765.000   13565         -1.45
 Rupee                  64.883      63.87         -1.56
 Ringgit                3.861       4.0440        +4.74
 Yuan                   6.297       6.5069        +3.34
 (Reporting By Christina Martin in Bengaluru
Editing by Jacqueline Wong)
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