October 9, 2019 / 7:33 AM / 11 days ago

Most Asian units firm; Thai baht hits over 6-year high

(Reuters) - Most Asian currencies edged higher against the dollar on Wednesday, with the Thai baht hitting a more than six-year peak, as investors held their ground amid a fresh escalation in Sino-U.S. tensions ahead of high-level trade talks.

New baht banknotes featuring Thailand's King Maha Vajiralongkorn are unveiled during a news conference at Bank of Thailand headquarters in Bangkok, Thailand, July 3, 2018. REUTERS/Athit Perawongmetha/File Photo

Relations between the world’s two biggest economies worsened after the U.S. government widened its trade blacklist to include some of China’s top artificial intelligence startups, which drew a sharp rebuke from Beijing.

Such altercations just days ahead of the high-level talks dampened hopes of a deal to be struck at the negotiation.

“Expectations for the high-level trade talks are very low. Thus, any news that suggests a further deterioration in the U.S.- China relationship has been broadly priced in,” said Eugenia Fabon Victorino, head of Asia strategy at Skandinaviska Enskilda Banken.

The Chinese yuan CNY=CFXS opened slightly weaker before firming 0.1%, while the Singapore dollar SGD= and the Taiwan dollar TWD=TP remained largely unchanged.

Meanwhile, the Indonesian rupiah IDR=ID slipped 0.2%, while the Indian rupee INR=IN and the Malaysian ringgit MYR= weakened marginally.

South Korean financial markets were closed for a holiday.

THAI BAHT

The baht THB=TH strengthened 0.3% against the dollar to its strongest since June 2013, with traders shrugging off the central bank's worries about the currency's strength.

The baht has been the strongest performer among Asian units this year, driven by the country’s hefty current account surplus and fund inflows. It has also shown a resilience to global volatility over the U.S.-China trade spat.

PHILIPPINE PESO

The peso PHP= firmed 0.3% after the central bank governor indicated that last month's rate cut may be the last for the year.

However, Governor Benjamin Diokno said the central bank will deliver more cuts in the reserve requirement ratio (RRR) should the inflation outlook continue to improve.

Inflation eased in September to the lowest in more than three years, putting this year’s inflation target within reach.

Reporting by Shreya Mariam Job in Bengaluru; Editing by Subhranshu Sahu

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