February 6, 2017 / 3:56 AM / 9 months ago

EM ASIA FX-Asian currencies rise as soft U.S. wage growth weighs on dollar

* Taiwan dollar at strongest in more than 19 months
    * Asian currencies rise broadly against the dollar
    * Disappointing U.S. wage growth weighs on greenback
    * Primary dealers see no Fed rate hike before Q2-Reuters

 (Adds text, updates prices)
    By Masayuki Kitano
    SINGAPORE, Feb 6 (Reuters) - Asian currencies rose against
the dollar on Monday after disappointing U.S. wage growth
reinforced expectations for the Federal Reserve to wait until
the second quarter before raising interest rates.
    The Taiwan dollar touched a 19-month high of 30.83 per U.S.
dollar at one point. 
    The South Korean won and Thai baht both rose to their
firmest in nearly three months. The won hit a peak of 1,136.3
 and the baht rose to 34.996 per U.S. dollar
at one point.  
    U.S. jobs data on Friday showed that nonfarm payrolls
increased by 227,000 jobs, the largest gain in four months. 
    The unemployment rate, however, edged up to 4.8 percent and
wages increased by only three cents, suggesting that there was
still some slack in the labour market. 
    The absence of a strong rise in wages suggests that the
possible timing of the Fed's next interest rate hike could be
pushed back, said Hirofumi Suzuki, an economist for Sumitomo
Mitsui Banking Corporation (SMBC) in Singapore.
    "It's positive for U.S. equities but negative for the
dollar," Suzuki said.
    "The U.S. dollar could be headed toward a test of levels
below 1.4 against the Singapore dollar," he added. 
    The Singapore dollar last stood at 1.4080 per U.S.
dollar. Earlier on Monday, the Singapore dollar rose to 1.4055,
matching a near three-month high that was set on Friday after
the U.S. jobs data. 
    A Reuters poll showed on Friday that Wall Street's top banks
expect just two rate hikes from the Fed this year. The poll of
primary dealers - the banks that do business directly with the
Fed - indicated none expect the next rate hike to occur before
the second quarter. 
    Twelve of the 14 respondents to the poll forecast the Fed
would raise the target rate for the benchmark federal funds rate
by 0.25 percentage point to between 0.75 percent and 1.00
percent by the end of the second quarter. 
    The signs of slowing U.S. wage growth are likely to
undermine the dollar against emerging Asian currencies for now,
said Gao Qi, FX strategist for Scotiabank in Singapore.
    Still, the greenback will probably resume its upward trend
in the run-up to the next Fed meeting in March, Gao said, adding
that Fed policymakers could start making hawkish-sounding
comments ahead of the meeting. 
    "In addition, the dollar has been oversold versus some
regional currencies such as the Korean won, Taiwan dollar and
Thai baht," Gao said.
    The 14-day exponential relative strength index (RSI), a
popular technical indicator, shows that the U.S. dollar has
recently moved deeper into oversold territory against the won.
The dollar's RSI against the won is now at about 19.9. Levels
below 30 are typically considered to be oversold.
  Change on the day at   0330 GMT                          
  Currency                Latest bid   Previous    Pct Move
  Japan yen                   112.38     112.57       +0.17
  Sing dlr                    1.4080     1.4076       -0.03
  Taiwan dlr                  30.908     31.050       +0.46
  Korean won                 1137.70    1147.60       +0.87
  Baht                         35.02      35.07       +0.15
  Peso                        49.725     49.780       +0.11
  Rupiah                       13328      13340       +0.09
  Rupee                        67.21      67.32       +0.16
  Ringgit                     4.4220     4.4260       +0.09
  Yuan                        6.8585     6.8727       +0.21
  Change so far in                                         
  Currency                Latest bid   End prev    Pct Move
  Japan yen                   112.38     117.07       +4.17
  Sing dlr                    1.4080     1.4490       +2.91
  Taiwan dlr                  30.908     32.279       +4.44
  Korean won                 1137.70    1207.70       +6.15
  Baht                         35.02      35.80       +2.24
  Peso                         49.73      49.72       -0.01
  Rupiah                       13328      13470       +1.07
  Rupee                        67.21      67.92       +1.06
  Ringgit                     4.4220     4.4845       +1.41
  Yuan                        6.8585     6.9467       +1.29

 (Reporting by Masayuki Kitano; Editing by Jacqueline Wong)

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