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EM ASIA FX-Asian currencies slip as Trump's tax plan pledge lifts dollar
February 10, 2017 / 6:51 AM / in 10 months

EM ASIA FX-Asian currencies slip as Trump's tax plan pledge lifts dollar

    * Asia FX slip after Trump vows "phenomenal" tax plan
    * Upbeat Chinese trade data helps temper some Asia FX losses

 (Adds text, updates prices)
    SINGAPORE, Feb 10 (Reuters) - Asian currencies fell on
Friday as the dollar gained a lift after President Donald Trump
vowed to announce a "phenomenal" tax plan, renewing hopes for
the possibility of pro-growth U.S. fiscal policies. 
    Losses for regional currencies were tempered by
better-than-expected Chinese January trade data that pointed to
an encouraging start for the world's second-largest economy and
bodes well for others in Asia.
    The Chinese trade data came against a backdrop of positive
risk sentiment and gains in regional equities, said a trader for
a Malaysian bank in Kuala Lumpur.
    The South Korean won fell 0.4 percent to 1,150.03
per dollar, after slipping to 1,154.5 at one point, the won's
weakest level since Feb. 1. 
    A near-term focus for the won is Friday's summit between
Trump and Japanese Prime Minister Shinzo Abe, which could have a
significant influence on Japan's yen, sending ripples to other
Asian currencies such as the won.
    Most other Asian currencies also retreated, with the 
Malaysian ringgit slipping 0.2 percent against the
    The dollar gained a boost after Trump promised a
"phenomenal" tax plan in a White House meeting with airline
executives on Thursday, although he offered no specifics while
citing the need to a lower tax burden on businesses.

    The White House said Trump plans to announce the most
ambitious tax reform plan since the Reagan era in the next few
    The comments by Trump provided a catalyst for the dollar's
rise and led to a pullback in Asian currencies, said Masashi
Murata, currency strategist for Brown Brothers Harriman in
    "Still, Asian currencies seem to be pretty firm even as U.S.
bond yields have risen," Murata said.
    Such resilience in Asian currencies stems from positive
economic fundamentals, underpinned by decent growth in developed
economies such as the United States, Murata said, adding that 
China's economy also seemed to be doing alright for now.
    China's yuan weakened against the dollar on Friday, with
news the Trump administration is stepping up efforts to improve
U.S.-China relations, setting up a period of possible fresh
catalysts for the currency market.
    Trump agreed to honour the United States' "One China" policy
during a phone call with Chinese President Xi Jinping, the White
House said late on Thursday.
    Washington's acknowledgement of China's position that it has
sovereignty over self-ruled Taiwan comes amid increasing
tensions between the two nations, with Trump's threats while
campaigning to label China a currency manipulator keeping global
markets on edge.
    On Friday, however, the yuan trades were relatively subdued,
and there was no notable impact on the markets from the upbeat
Chinese trade data either, traders said.
  Change on the day at   0612 GMT                       
  Currency              Latest bid   Previous   Pct Move
  Japan yen                 113.74     113.26      -0.43
  Sing dlr                  1.4213     1.4206      -0.05
  Taiwan dlr                31.083     31.046      -0.12
  Korean won               1150.30    1145.80      -0.39
  Baht                       35.05      35.00      -0.14
  Peso                      49.910     49.870      -0.08
  Rupiah                     13310      13300      -0.08
  Rupee                      66.93      66.85      -0.11
  Ringgit                   4.4440     4.4370      -0.16
  Yuan                      6.8779     6.8675      -0.15
  Change so                                             
 far in 2017                                   
  Currency              Latest bid   End prev   Pct Move
  Japan yen                 113.74     117.07      +2.93
  Sing dlr                  1.4213     1.4490      +1.95
  Taiwan dlr                31.083     32.279      +3.85
  Korean won               1150.30    1207.70      +4.99
  Baht                       35.05      35.80      +2.15
  Peso                       49.91      49.72      -0.38
  Rupiah                     13310      13470      +1.20
  Rupee                      66.93      67.92      +1.49
  Ringgit                   4.4440     4.4845      +0.91
  Yuan                      6.8779     6.9467      +1.00

 (Reporting by Masayuki Kitano in SINGAPORE; Additional
reporting by Yena Park in SEOUL, Winni Zhou and John Ruwitch in
SHANGHAI; Editing by Richard Borsuk)

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