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EM ASIA FX-Won, ringgit falter on China worries, oil prices
March 9, 2016 / 7:43 AM / 2 years ago

EM ASIA FX-Won, ringgit falter on China worries, oil prices

(Adds text, updates prices)
    * China slowdown concerns weigh on Asian currencies
    * Ringgit slips in wake of previous drop in oil prices
    * Malaysia c.bank expected to keep key interest rate steady

    By Masayuki Kitano
    SINGAPORE, March 9 (Reuters) - The South Korean won and
Malaysian ringgit fell against the dollar on Wednesday as
renewed worries about a slowdown in China and oil's retreat from
the previous day's highs weighed on riskier assets.
    After having risen broadly last week amid signs of inflows
into emerging markets, Asian currencies have lost some steam in
the past few days.
    "Asian currencies have been undergoing quite a sharp rally
in recent sessions, and I think we're probably seeing a bit of
profit-taking at the moment," said Mitul Kotecha, head of Asia
FX and rates strategy for Barclays in Singapore.
    The South Korean won edged lower, with pressure seeming to
come partially from renewed concerns about the economic slowdown
in China, South Korea's largest export market.
    Data on Tuesday had shown that China's February trade
performance was far worse than economists had expected, with
exports tumbling the most in over six years, and imports
continuing to slump.    
    The Malaysian ringgit pulled away from 6-1/2 month highs set
earlier in the week, coming under pressure after global oil
prices fell the previous day. Brent crude was last up 0.6
percent, after falling 2.9 percent on Tuesday.
    Analysts are cautious on the outlook for Asian currencies,
given the risk that the dollar could see renewed strength if
market expectations increase for the U.S. Federal Reserve to
raise interest rates in the next few months.
    At its policy meeting next week, the Fed might lay the
groundwork for an interest rate rise "maybe in April or June" in
the wake of a recent pick-up in U.S. inflation measures, said
Philip Wee, senior currency economist for DBS Bank.
    If that turns out to be the case, U.S. yields could rise and
give the dollar a lift against Asian currencies, he added.
    
    MALAYSIAN RINGGIT 
    The ringgit was last bid at 4.1200, down from a peak
of 4.0700 touched on Tuesday, the ringgit's highest level since
mid-August 2015. 
    Malaysia's central bank is expected to keep its key interest
rate steady at its policy decision later on Wednesday. Bank
Negara Malaysia (BNM) is seen likely to maintain the overnight
policy rate at 3.25 percent. 
    Wednesday's meeting will be the last for Governor Zeti
Akhtar Aziz, who retires on April 30 after 16 years at the helm,
and the market's focus is on who will be named as her successor.
 
    
    CURRENCIES VS U.S. DOLLAR
                                                           
  Change on the day at   0715 GMT                          
  Currency    Latest bid   Previous day    Pct Move
  Japan yen       112.52         112.63       +0.10
  Sing dlr        1.3852         1.3848       -0.03
  Taiwan dlr      32.935         33.062       +0.39
  Korean won     1213.42        1206.70       -0.55
  Baht             35.34          35.42       +0.23
  Peso             46.87          46.96       +0.18
  Rupiah*       13138.00       13138.00       +0.00
  Rupee            67.36          67.35       -0.01
  Ringgit         4.1200         4.1075       -0.30
  Yuan            6.5149         6.5046       -0.16
                                                           
  Change so far                                            
 in 2016                                               
  Currency    Latest bid  End prev year    Pct Move
  Japan yen       112.52         120.30       +6.91
  Sing dlr        1.3852         1.4177       +2.35
  Taiwan dlr      32.935         33.066       +0.40
  Korean won     1213.42        1172.50       -3.37
  Baht             35.34          36.00       +1.87
  Peso             46.87          47.06       +0.41
  Rupiah        13138.00       13785.00       +4.92
  Rupee            67.36          66.15       -1.79
  Ringgit         4.1200         4.2935       +4.21
  Yuan            6.5149         6.4936       -0.33
                                                           
 ------------------------------------------------          
  *Indonesia's markets are closed on Wednesday for a public
holiday. 

 (Additional reporting by IFR Markets' Catherine Tan and Dahee
Kim in Seoul; Editing by Kim Coghill)

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