January 7, 2019 / 5:08 AM / 9 months ago

EM ASIA FX-Asian units climb as dollar slips on Fed comments; rupiah leads gains

 (Adds text, updates prices)
    By Aby Jose Koilparambil
    Jan 7 (Reuters) - Emerging Asian currencies strengthened
across the board on Monday as the dollar retreated following
comments by Federal Reserve Chairman Jerome Powell that boosted
risk appetites.
    Powell on Friday said the Fed is not on a preset path of
interest rate hikes and suggested that it could pause its policy
tightening as it did in 2016.
    His pledge of sensitivity to downside risks the market was
pricing in meant the greenback gave up all the gains logged
after December data released earlier on Friday showed U.S.
employers hired the most workers in 10 months while boosting
    "The improvement in risk appetite, together with Powell's
latest comments, may continue to see the USD stall... In the
interim, (we) expect investors to ride the cyclicals and EM FX
higher on the back of improved appetite," said OCBC Bank in a
    Risk appetites were also whetted by China's aggressive
monetary easing announced on Friday and this week's meeting of
U.S. and Chinese officials for the first face-to-face talks
since both countries in December agreed to a 90-day truce in a
their trade war.
    The Indonesian rupiah led Monday's gains, rising as
much as 1.9 percent to 13,990 to the dollar, its strongest level
in more than six months.
    The Korean won rose as much as 0.8 percent to
1,115.50 against the dollar, while the Indian rupee
gained up to 0.7 percent, touching its strongest point since
Aug. 10.
    The Malaysian ringgit firmed as much as 0.6 percent
to 4.108 against the dollar, its best since August.
    The Thai baht and Chinese yuan both
appreciated as much as 0.4 percent. The Thai currency scaled its
best level in seven months.
    The appreciation in rupiah was also aided by a statement
that the country's central bank would intervene in the domestic
non-deliverable forward (NDF) market to provide liquidity.
    Nanang Hendarsah, head of Bank Indonesia's monetary
management, said the intervention will be conducted through
brokers, separate from the central bank's daily auction to boost
the volume of the domestic NDF transactions and deepen the
market for hedging needs.
    OCBC analysts said they expect Indonesia to remain a
favoured recipient of net investor inflows in the Asia region,
with the rupiah remaining a good "outperformer" candidate.

    The following table shows rates for Asian currencies against
the dollar at 0503 GMT.
 Currency                     Latest bid  Previous day  Pct Move
 Japan yen                    108.280     108.52        +0.22
 Sing dlr                     1.356       1.3590        +0.20
 Taiwan dlr                   30.804      30.863        +0.19
 Korean won                   1119.500    1124.5        +0.45
 Baht                         31.950      32.06         +0.34
 Peso                         52.390      52.58         +0.36
 Rupiah                       14025.000   14265         +1.71
 Rupee                        69.355      69.72         +0.53
 Ringgit                      4.108       4.134         +0.63
 Yuan                         6.847       6.8710        +0.36
 Change so far in 2019                                  
 Currency                     Latest bid  End 2018      Pct Move
 Japan yen                    108.280     109.56        +1.18
 Sing dlr                     1.356       1.3627        +0.47
 Taiwan dlr                   30.804      30.733        -0.23
 Korean won                   1119.500    1115.70       -0.34
 Baht                         31.950      32.55         +1.88
 Peso                         52.390      52.58         +0.36
 Rupiah                       14025.000   14375         +2.50
 Rupee                        69.355      69.77         +0.60
 Ringgit                      4.108       4.1300        +0.54
 Yuan                         6.847       6.8730        +0.39
 (Reporting by Aby Jose Koilparambil in Bengaluru; Editing by
Richard Borsuk)
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