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EM ASIA FX-Singapore dlr hits 7-mth low pre-MAS decision; China data hurts Asia FX
October 13, 2016 / 6:01 AM / in a year

EM ASIA FX-Singapore dlr hits 7-mth low pre-MAS decision; China data hurts Asia FX

* MAS seen on hold on Fri; surprise easing may hurt Sing dlr
    * Yuan at 6-year low on disappointing Sept China trade data
    * Baht barely moves amid concern on Thai King's health
    * Ringgit falls as Sept bond outflows revised to $2 bln

 (Adds text, updates prices)
    By Jongwoo Cheon
    SINGAPORE, Oct 13 (Reuters) - Singapore's dollar hit a
seven-month low on Thursday, a day before a central bank
monetary policy decision, while most emerging Asian currencies
slid on disappointing Chinese trade data and expectations of a
U.S. interest rate hike in December.
    Thailand's baht barely moved, while the benchmark
share index was down 2 percent amid growing concerns
about the health of the 88-year-old King Bhumibol Adulyadej.
 
    The Singapore dollar lost 0.2 percent to 1.3866 per
U.S. dollar, its weakest since March 10, and then pared much of
that decline.
    The Monetary Authority of Singapore (MAS) is widely expected
to keep its exchange-rate based policy steady in its semiannual
review on Friday, a Reuters poll showed. 
    But some investors and analysts saw a risk the MAS would
announce monetary stimulus, which would pressure the Singapore
dollar, as sluggish global demand keeps denting the
trade-reliant economy.
    "Should the MAS surprise market consensus with some form of
easing, it is likely that SGD will weaken fairly quickly past
the 1.40 level against the USD," said Heng Koon How, senior FX
investment strategist for Credit Suisse in Singapore.
    Some analysts expected a rebound in the Singapore dollar if
the central bank stays pat, saying the currency has priced in
minority's views of easing to some degree.
    However, Heng of Credit Suisse said the currency is unlikely
to recover much as the U.S. dollar will stay firm on growing
prospects that the Federal Reserve will raise interest rates in
December.
    Among U.S. central bank policymakers, several voting members
judged a hike would be warranted "relatively soon" if the
world's biggest economy continued to strengthen but doubts on
inflation remained, the minutes of the Fed's September meeting
showed on Wednesday. 
    
    CHINA WORRIES
    Most emerging Asian currencies extended losses after data
showing China's September exports fell much more than projected
while imports unexpectedly shrank. 
    The Chinese yuan hit a six-year low, adding to
prospects that the country may pursue a weaker currency policy
in coming months. China's central bank set its daily guidance
rate for a seventh day in a row to six-year lows,
partially reflecting the dollar's strength during local holidays
last week.
    "Although China appears to be making up for lost time with a
seven-day run of higher USD/CNY fixes, there is more work to be
done," said Sue Trinh, head of Asia FX strategy at Royal Bank of
Canada in a note.
    "GDP growth in Q2 and Q3 was propped up by a housing bubble
and huge state stimulus, but there are signs that these support
factors are fading," she said.
    Malaysia's ringgit fell 0.5 percent to 4.2100
against the U.S. dollar, its weakest since Feb. 29.
    The central bank revised the September bond outflows figure
to 8.4 billion ringgit ($2.0 billion) from the initial 1.4
billion ringgit, increasing concerns that foreigners may dump
the country's bonds on expectations of Fed tightening.
    With the revision, September had the largest monthly bond
outflows since August last year when the country's markets
tumbled on a political crisis hitting Prime Minister Najib Razak
and corruption allegations involving indebted state fund
1Malaysia Development Berhad (1MDB).
    The South Korean won lost 1.1 percent to 1,136.5
per U.S. dollar, its weakest since July 26, leading regional
losses.
    Currency traders almost ignored the central bank decision to
keep interest rates unchanged at 1.25 percent for a fourth
consecutive month, as that was widely expected. 
    The baht stayed around Wednesday's close of 35.73 per
dollar. The Thai currency in the previous session touched a near
nine-month trough.
    Foreign investors cut Thai bond holdings by 37.4 billion
baht ($1.0 billion) in total so far this week, according to
Reuters' calculation based on data from the Thai Bond Market
Association.
    Offshore funds also were net sellers in the Bangkok stock
market in the previous two sessions.
    Thailand's palace said on Wednesday the health of the king
has "overall not yet stabilised". 

    CURRENCIES VS U.S. DOLLAR
    Change on the day at 0545 GMT
  Currency                Latest bid   Previous day  Pct Move
  Japan yen                   103.78         104.18     +0.39
  Sing dlr                    1.3848         1.3845     -0.02
  Taiwan dlr                  31.715         31.629     -0.27
  Korean won                 1134.60        1123.60     -0.97
  Baht                         35.69          35.73     +0.12
  Peso                        48.470         48.540     +0.14
  Rupiah                       13040          13017     -0.18
  Rupee                        66.82          66.53     -0.43
  Ringgit                     4.2100         4.1900     -0.48
  Yuan                        6.7279         6.7200     -0.12
                                                             
  Change so far in 2016                                      
  Currency                Latest bid  End prev year  Pct Move
  Japan yen                   103.78         120.30    +15.92
  Sing dlr                    1.3848         1.4177     +2.38
  Taiwan dlr                  31.715         33.066     +4.26
  Korean won                 1134.60        1172.50     +3.34
  Baht                         35.69          36.00     +0.88
  Peso                         48.47          47.06     -2.91
  Rupiah                       13040          13785     +5.71
  Rupee                        66.82          66.15     -1.01
  Ringgit                     4.2100         4.2935     +1.98
  Yuan                        6.7279         6.4936     -3.48
 
 (Reporting by Jongwoo Cheon; Additional reporting by Reuters FX
Analyst Rick Lloyd; Editing by Richard Borsuk)

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