November 30, 2016 / 5:31 AM / 3 years ago

EM ASIA FX-Trump, rising US yields knock Asia FX in November

* Yuan heads for worst month since devaluation in Aug 2015
    * Chinese state banks seen selling USD for 3rd session
    * Malaysian ringgit leads monthly Asia FX losses

 (Adds text, updates prices)
    By Jongwoo Cheon
    SINGAPORE, Nov 30 (Reuters) - Emerging Asian currencies were
set to post monthly losses in November after Republican Donald
Trump's surprise U.S. election win inspired a rousing rally in
the dollar.
    Wednesday's Asian session saw modest gains for regional
currencies, with the Chinese yuan hitting 6.8822 per
dollar, its strongest since Nov. 17.
    The relative stability in the yuan follows news on Tuesday
that Beijing is stepping up measures to stem capital outflows
after the currency skidded to more than eight-year lows.
 State-owned banks were also seen providing dollar
liquidity on Wednesday for a third straight session, in what
traders said appeared to be efforts to stabilise the currency.
 
    Emerging Asian currencies found some relief this week as the
dollar paused for breath after its surge since Trump's election
win on Nov. 8. The greenback edged up on Wednesday as U.S. debt
yield resume their ascent.
    Expectations the Trump administration will boost fiscal
spending, growth and inflation pushed up U.S. Treasury yields as
traders bet the Federal Reserve will need to raise borrowing
costs at a faster pace than previously anticipated. 
    Asian assets have also come under pressure on concerns 
Trump's protectionist bias on trade will deal a blow to the
region's export-reliant economies.
    "A stronger USD and rising U.S. yield environment tends to
cause volatility in capital flows and pose a headwind to Asian
currencies," said analysts at ANZ said in a note.
    ANZ's analysts said they are most bearish on the South
Korean won and the Singapore dollar, saying
"the real effective exchange rates of both currencies are
elevated given the state of their economic cycles."
    
    RINGGIT LEADS
    Malaysia's ringgit has lost 6.1 percent against the
U.S. dollar so far this month on bond outflows.
    The currency's slide would be the largest monthly
depreciation since August last year when domestic markets
tumbled as a financial scandal at state fund 1Malaysia
Development Berhad (1MDB) engulfed Prime Minister Najib Razak.
    The ringgit stood at 4.4640 per dollar, its lowest since
September 2015, as weak crude prices added to concerns over
Malaysia's oil and gas revenue. Oil prices remained weak ahead
of an OPEC meeting later on Wednesday, with members of the
producer cartel trying to thrash out an output cut to curb
oversupply. 
    Bank Negara Malaysia earlier this month imposed curbs on
offshore ringgit trading, spurring fears of imminent capital
controls despite denials by the central bank. 
    Elsewhere in Asia, the yuan has skidded 1.6 percent, which
would be the largest monthly loss since August last year when
China surprised markets with a one-off devaluation. 
    The won has lost 2.0 percent as foreign investors cut
holdings in one of the most liquid emerging Asian assets.
    An influence-peddling scandal that has embroiled South
Korean President Park Geun-hye in a deepening political crisis
has also hurt investor sentiment. 
    "Too many uncertainties for the KRW," said Nordea Markets'
chief analyst Amy Yuan Zhuang in Singapore, referring to the
won.
    "But if Park resigns, political risk is dampened in Korea,
then KRW could see larger relief."
    Indonesia's rupiah has slumped 3.8 percent so far
this month, which would be the largest monthly loss since
September 2015. Foreign investors dumped local equities and
bonds.
    The Indian rupee has slid 2.7 percent this month as
the currency hit a record low on capital outflows, while the
Singapore dollar has fallen 2.4 percent on growing risks of a
recession.
    The Philippine peso has lost 2.7 percent on
equity outflows.
    
    CURRENCIES VS U.S. DOLLAR
    Change on the day at 0435 GMT
  Currency                Latest bid   Previous day  Pct Move
  Japan yen                   112.89         112.40     -0.43
  Sing dlr                    1.4254         1.4248     -0.04
  Taiwan dlr                  31.888         31.818     -0.22
  Korean won                 1168.26        1168.50     +0.02
  Baht                         35.63          35.68     +0.15
  Peso                        49.730         49.710     -0.04
  Rupiah                       13560          13570     +0.07
  Rupee                        68.62          68.65     +0.05
  Ringgit                     4.4640         4.4640     +0.00
  Yuan                        6.8857         6.8980     +0.18
                                                             
  Change so far in 2016                                      
  Currency                Latest bid  End prev year  Pct Move
  Japan yen                   112.89         120.30     +6.56
  Sing dlr                    1.4254         1.4177     -0.54
  Taiwan dlr                  31.888         33.066     +3.69
  Korean won                 1168.26        1172.50     +0.36
  Baht                         35.63          36.00     +1.04
  Peso                         49.73          47.06     -5.37
  Rupiah                       13560          13785     +1.66
  Rupee                        68.62          66.15     -3.59
  Ringgit                     4.4640         4.2935     -3.82
  Yuan                        6.8857         6.4936     -5.69
 
 (Reporting by Jongwoo Cheon; Editing by Shri Navaratnam)
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