February 6, 2018 / 6:17 AM / 6 months ago

EM ASIA FX-Asia FX hit by equities rout, yuan holds steady

    * Equity sell-off leads to weaker currencies
    * China's yuan maintains relative stability
    * Philippine peso weakens despite stronger CPI data

 (Adds text, updates prices)
    By Aaron Saldanha
    Feb 6 (Reuters) - Most Asian currencies lost further ground
against the U.S. dollar on Tuesday, as investor sentiment was
battered by a global sell-off in equities.
    MSCI's broadest index of Asia-Pacific shares outside Japan
 slid 3.5 percent to a one-month low, extending
Monday's fall of 1.6 percent.
    "The capital outflow coming out because of the stock market
dumping right now is weighing on sentiment," said Stephen Innes,
head of trading for Asia Pacific at OANDA.    
    "What we are seeing is a stronger U.S. dollar profile... we
tend to panic when we have moves like this and we all know this
so we pull out of the market and like to be the first out of the
market."
    The dollar index against a basket of six major currencies
 stood at 89.610. Since Friday, when the selloff in
equities began in earnest, the index has gained about 1.1
percent.    
    However, the dollar weakened against Japan's yen,
another safe haven currency, losing as much as 0.6 percent.
    South Korea's won was 0.58 percent weaker against
the dollar. The currency touched its lowest level since
November, 2017, before recovering some lost ground.
    The Thai baht was also among the region's biggest
losers for a second straight day, weakening nearly 0.4 percent.
    Similarly, the Taiwan dollar slipped 0.3 percent
and the Malaysian ringgit fell 0.4 percent.
    India's rupee followed suit, losing about 0.35
percent ahead of the central bank's rate-setting meeting on
Wednesday.
    The Singapore dollar weakened marginally on Tuesday,
after firming about 0.17 percent the previous day.
    
    PHILIPPINE PESO 
    The Philippine peso eased 0.1 percent, while the
country's equity index dropped as much as 2.7 percent.
    Data showed the consumer price index rose 4.0 percent in
January from a year earlier, above a Reuters poll forecast.
    The inflation figure matched the top end of the central
bank's 2-4 percent comfort range and the central bank said it
stands ready to "take timely action."
    
    CHINESE YUAN 
    In contrast to the region's volatility, the Chinese yuan
 was on an even keel and was slightly firmer against
the dollar.
    "Later on this year, Chinese government bonds are going to
be included in a lot of bond indexes and I think people are
starting to look at buying the yuan," OANDA's Innes said.
    "When we go into asset rotation into bonds, I think the
attractiveness of Chinese bond yields, especially if they are
going to be included in the broader basket of MSCI, plays out
well."
    
     The following table shows rates for Asian currencies
against the dollar at 0520 GMT.
    CURRENCIES VS U.S. DOLLAR
   Change on day at 0520 GMT                               
  Currency                      Latest bid  Previous    Pct
                                                 day   Move
  Japan yen                     108.740       109.09  +0.32
  Sing dlr                      1.322         1.3215  -0.02
  Taiwan dlr                    29.404        29.307  -0.33
  Korean won                    1094.900      1088.5  -0.58
  Baht                          31.640         31.52  -0.38
  Peso                          51.570         51.51  -0.12
  Rupiah                        13600.000      13520  -0.59
  Rupee                         64.285         64.06  -0.35
  Ringgit                       3.914          3.898  -0.41
  Yuan                          6.292         6.2940  +0.03
                                                           
  Change so far                                            
  Currency                      Latest bid  End 2017    Pct
                                                       Move
  Japan yen                     108.740       112.67  +3.61
  Sing dlr                      1.322         1.3373  +1.17
  Taiwan dlr                    29.404        29.848  +1.51
  Korean won                    1094.900     1070.50  -2.23
  Baht                          31.640         32.58  +2.97
  Peso                          51.570         49.93  -3.18
  Rupiah                        13600.000      13565  -0.26
  Rupee                         64.285         63.87  -0.65
  Ringgit                       3.914         4.0440  +3.32
  Yuan                          6.292         6.5069  +3.42
 
 (Reporting by Aaron Saldanha in Bengaluru
Editing by Shri Navaratnam)
  
 
 
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