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EM ASIA FX-Asian currencies subdued after rout in commodities
May 5, 2017 / 6:06 AM / 7 months ago

EM ASIA FX-Asian currencies subdued after rout in commodities

 (Adds text, updates prices)
    By Shashwat Pradhan
    May 5 (Reuters) - Most Asian currencies edged lower on
Friday as fresh falls in commodity prices raised concerns about
the health of the global economy.
    Chinese iron ore futures plunged to their lowest since
January, extending this week's losses and dragging steel down as
well, with investors liquidating long positions amid growing
worries about slowing construction and infrastructure
demand.
    In other commodities, oil slumped to five-month lows on
Thursday amid record trading volume in Brent crude, as
Organization of the Petroleum Exporting Countries (OPEC) and
other producers appeared to rule out deeper supply cuts to
reduce the world's persistent glut of crude.
    Markets also remained cautious ahead of U.S. government
payrolls report expected later in the day, following March's
underwhelming 98,000 figure. Economists on average expect
185,000 jobs were created in April.         
    Attention will also be on Fed officials including Fed Chair
Janet Yellen and Vice Chair Stanley Fischer, who are due to
speak on Friday.
    "Any indication of wage pressure, coupled with speeches from
Yellen, Fischer, Williams, Rosengren, Evans and Bullard would
keep market players on their toes going into the weekend," OCBC
Bank said in a note. 
    The Malaysian ringgit was among the big decliners,
weakening 0.2 percent against the dollar as government data
showed that annual export growth in March slowed slightly from
the previous month.
    Exports in March rose 24.1 percent from a year earlier,
beating economists' forecast of a 19.2 percent rise, but were
down slightly from the 26.5 percent increase in February.
    The trade surplus in March narrowed to 5.4 billion ringgit 
($1.25 billion) from February's 8.7 billion ringgit.
    "The  exports reflect the impact of higher commodity prices
previously. From a forward looking perspective, it's the outlook
for those prices that matters. The sharp decline in energy
prices has likely weakened sentiment on the ringgit in the short
term," said Tariq Ali, investment strategist at Standard
Chartered Bank.
    Bucking the trend, the Japanese yen gained 0.2
percent against the dollar.
    Japan's finance ministry has proposed to launch bilateral
foreign exchange swap arrangements of up to 40 billion dollars
with Southeast Asian nations to enable Tokyo to provide yen
funds to these countries during times of financial
crisis.
    
    ASIAN CURRENCY POSITIONING
    Sentiment toward Asian currencies has improved from two
weeks ago, as worries about the risk of an anti-establishment
shock from the French presidential elections subsided, a Reuters
poll showed on Thursday.
    Bullish bets on the Taiwan dollar nearly doubled
compared with the previous poll two weeks ago, and rose to the
largest since February 2011, according to the poll of 15
analysts, traders and fund managers.
    The Taiwan dollar, which hit a 2-1/2 year high of 29.940 per
U.S. dollar on Wednesday, has rallied this year on the back of
foreign investor inflows into Taiwanese equities.
    Volatility in the currency against the U.S. dollar is
"unavoidable", and the central bank would not intervene in
response to continuing foreign fund inflows, Taiwan's central
bank deputy governor said on Wednesday.
    Among other Asian currencies, investors were estimated to
have increased their long positions in the Indian rupee
to the largest since May 2014.
    The rupee had hit a 20-month high against the dollar on
April 26, as India's benchmark stock indexes rallied to record
highs.
    
    INDONESIAN RUPIAH
    The Indonesian rupiah edged lower on Friday to a near
one-month low against the dollar.
    Indonesia, Southeast Asia's largest economy, grew 5.01
percent in January-March on an annual basis, the statistics
bureau said.
    On a quarterly, non-seasonally adjusted basis, gross
domestic product (GDP) contracted 0.34 percent.
    The government's growth target for 2017 is 5.1 percent,
while Bank Indonesia is forecasting a 5.0-5.4 percent growth.
    
    The following table shows rates for Asian currencies against
the dollar at 0533 GMT.
    
    CURRENCIES VS U.S. DOLLAR
    
  Currency                Latest bid  Previous day   Pct Move
  Japan yen              112.180            112.45      +0.24
  Sing dlr               1.404              1.4003      -0.27
  Taiwan dlr             30.157             30.140      -0.06
  Korean won*            1132.700           1130.5      -0.19
  Baht                   34.590              34.59       0.00
  Peso                   49.905              49.87      -0.07
  Rupiah                 13335.000           13326      -0.07
  Rupee                  64.310              64.18      -0.21
  Ringgit                4.335               4.326      -0.21
  Yuan                   6.895              6.8956      +0.01
                                                             
  Change so far                                              
  Currency               Latest bid   End 2016       Pct Move
  Japan yen              112.180            117.07      +4.36
  Sing dlr               1.404              1.4490      +3.20
  Taiwan dlr             30.157             32.279      +7.04
  Korean won*            1132.700          1207.70      +6.62
  Baht                   34.590              35.80      +3.50
  Peso                   49.905              49.72      -0.37
  Rupiah                 13335.000           13470      +1.01
  Rupee                  64.310              67.92      +5.61
  Ringgit                4.335              4.4845      +3.45
  Yuan                   6.895              6.9467      +0.75
 * South Korean market is closed for a holiday

 ($1 = 4.3370 ringgit)

 (Reporting By Shashwat Pradhan in Bengaluru, additional
reporting by Anusha Ravindranath; Editing by Gopakumar Warrier)
  
 
 

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