January 23, 2017 / 6:38 AM / a year ago

EM ASIA FX-Asian currencies rise on uncertainty over Trump's fiscal policy

* Asian currencies rise broadly against the dollar
    * Trump's inaugural speech stresses 'America first'
    * Investors await more details on Trump's fiscal policy

 (Adds text, updates prices)
    By Masayuki Kitano
    SINGAPORE, Jan 23 (Reuters) - Asian currencies rose on
Monday as the dollar fell after U.S. President Donald Trump's
inauguration speech disappointed some investors who were looking
for more details on his plans for fiscal stimulus. 
    Trump's first address as president on Friday highlighted his
"America first" policies that were short on specific proposals,
and disappointed investors hoping for details on his plans to
stoke growth, spend on infrastructure and reduce taxes.    
    "Overall, investors were disappointed that Trump did not
provide details on his plans to stimulate the U.S. economy at
his...inauguration speech," analysts for DBS Bank said in a
research note.
    "For now, the market continues to view the current U.S.
dollar fall as a correction," they added.
    Emerging Asian currencies rose broadly, including the 
Chinese yuan and the Singapore dollar, which
both rose around 0.5 percent. 
    Investors are waiting for Trump and his administration to
flesh out details of fiscal stimulus plans over their first 100
days in office, analysts said.
    "If there's a greater certainty that stimulus will be quite
significant in this year, then I expect the dollar to really be
rallying strongly," said Chang Wei Liang, FX strategist for
Mizuho Bank in Singapore.
    Such a dollar rally could occur toward the end of Trump's
first 100 days in office, once there is more clarity on his
fiscal policies, Chang said. 
    "But if the stimulus proves to be a bit more of a
medium-term thing, then there could be some corresponding amount
of paring of (long) dollar positions," he added.
    In his inaugural address, Trump pledged to end what he
called an "American carnage" of rusted factories and vowed to
put "America first", laying out two simple rules - buy American
and hire American. 
    Trump's new administration said on Friday its trade strategy
to protect American jobs would start with withdrawal from the
12-nation Trans-Pacific Partnership (TPP) trade pact.
 
    A White House statement issued soon after Trump's
inauguration said the United States would also "crack down on
those nations that violate trade agreements and harm American
workers in the process."
    Asian currencies have historically tended to weaken in the
weeks after the U.S. president's inauguration speech, Alastair
Pinder, Asian FX strategist for HSBC, said in a research note.
    "Trump's focus on the economy and trade protectionism during
his inauguration suggest this time will be no different," Pinder
wrote. 
    "Rhetoric from Trump's team towards the likes of China has
already intensified in recent months and if this escalates
further, we believe volatility in Asian currencies will be sure
to rise," Pinder added. 

    CURRENCIES VS U.S. DOLLAR
  Change on the day at   0606 GMT                      
  Currency              Latest bid   Previous  Pct Move
                                          day  
  Japan yen                 113.28     114.65     +1.21
  Sing dlr                  1.4184     1.4250     +0.47
  Taiwan dlr                31.396     31.533     +0.44
  Korean won               1165.70    1169.20     +0.30
  Baht                       35.26      35.41     +0.44
  Peso                      49.840     49.920     +0.16
  Rupiah                     13365      13405     +0.30
  Rupee                      68.06      68.18     +0.18
  Ringgit                   4.4380     4.4430     +0.11
  Yuan                      6.8456     6.8820     +0.53
                                                       
  Change so                                            
 far in 2017                                   
  Currency              Latest bid   End prev  Pct Move
                                         year  
  Japan yen                 113.28     117.07     +3.35
  Sing dlr                  1.4184     1.4490     +2.16
  Taiwan dlr                31.396     32.279     +2.81
  Korean won               1165.70    1207.70     +3.60
  Baht                       35.26      35.80     +1.56
  Peso                       49.84      49.72     -0.24
  Rupiah                     13365      13470     +0.79
  Rupee                      68.06      67.92     -0.21
  Ringgit                   4.4380     4.4845     +1.05
  Yuan                      6.8456     6.9467     +1.48
 
 (Reporting by Masayuki Kitano; Editing by Jacqueline Wong)
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