October 12, 2017 / 5:28 AM / 8 months ago

EM ASIA FX-Asian currencies creep up as inflation woes dog dollar

    By Hanna Paul
    Oct 12 (Reuters) - Asian currencies were most higher on
Thursday as uncertainty over the U.S. inflation outlook weighed
on the dollar.
    Minutes of the U.S. central bank's latest policy meeting
shed light on growing concerns over the persistently low
inflation in the U.S. economy and raised questions about anthe
interest rate hike expected in December.
    Many policymakers admitted that additional tightening or
changes to the monetary policy was dependant on how inflation
pans out for the rest of the year.
    The Fed minutes revealed some doubts as to whether weak
inflation is "transitory", Mizuho Daily said in a note.
    The dollar index, that checks the dollar against a
basket of currencies, sank to a two-week low.
    "Risk appetite is fairly firm and the weakness in the dollar
is giving some support to Asian currencies," said Mitul Kotecha,
head of Asia macro strategy in Barclays.
    Among emerging Asian currencies, the Korean won
was helped by further inflows into Seoul's KOSPI share index
, which hit a new high as foreign investors added to
their bets on strong earnings reports later in the week.

    The Malaysian ringgit rose marginally after data
showed the country's industrial production in August grew at its
fastest pace since March 2015.
    "In Malaysia, some degree of moderation heading into 2018
can be expected. Deleveraging in China, rising trade
protectionism and normalisation of global monetary policies
could keep external demand in check," DBS Group research said in
a note.
    The Singapore dollar, the Taiwan dollar and
the Thai baht rose to levels unseen since Sept 26. 
    The baht also continued to be supported by news that the
country would hold general elections next year after a long
period of military rule.
    The Taiwan dollar gained as September exports picked up at
their fastest pace in over seven years.
    The Philippine peso, on the other hand, looked
set for its fifth losing session out of six.
    Government officials insisted on Wednesday that prospects
for attracting more foreign investment remained bright, but that
failed to lighten the mood after a drastic drop in foreign
equity inflows in the first half of the year.
   The Singapore dollar rose to its highest in over two
weeks, ahead of a policy announcement from the Monetary
Authority of Singapore on Friday.
    The central bank is expected to stand pat on monetary policy
at its semi-annual review as inflation remains subdued,
according to analysts polled by Reuters.
    "The market appears positioned for a hawkish tilt ahead of
the policy meeting," DBS Research said in a note, while adding
that it thinks the bank may stick with its forward guidance of
keeping to a neutral stance for an extended period.
    The following table shows rates for Asian currencies against
the dollar at 0459 GMT.

 Change on the day at 0459 GMT                                 
  Currency                      Latest bid  Previous day    Pct
  Japan yen                     112.340           112.48  +0.12
  Sing dlr                      1.353             1.3541  +0.08
  Taiwan dlr                    30.220            30.232  +0.04
  Korean won                    1134.000          1135.2  +0.11
  Baht                          33.100             33.21  +0.33
  Peso                          51.380             51.35  -0.06
  Rupiah                        13499.000          13515  +0.12
  Rupee                         65.140             65.14  +0.00
  Ringgit                       4.214               4.22  +0.14
  Yuan                          6.590             6.5882  -0.03
  Change so far in 2017                                        
  Currency                      Latest bid  End 2016        Pct
  Japan yen                     112.340           117.07  +4.21
  Sing dlr                      1.353             1.4490  +7.10
  Taiwan dlr                    30.220            32.279  +6.81
  Korean won                    1134.000         1207.70  +6.50
  Baht                          33.100             35.80  +8.16
  Peso                          51.380             49.72  -3.23
  Rupiah                        13499.000          13470  -0.21
  Rupee                         65.140             67.92  +4.27
  Ringgit                       4.214             4.4845  +6.42
  Yuan                          6.590             6.9467  +5.41
 (Reporting by Hanna Paul; Editing by Kim Coghill)
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