March 15, 2019 / 6:47 AM / 4 months ago

EM ASIA FX-Asian currencies eke out small gains; S. Korean won falls

    * S. Korean won hits 4-month low
    * Indian rupee set to gain for fifth straight week
    * Indonesia posts surprise trade surplus in Feb

 (Adds text, updates prices)
    By Shriya Ramakrishnan
    March 15 (Reuters) - Most emerging Asian currencies made
small gains on Friday as improved sentiment over reports of
progress in U.S.-China trade talks was partially tempered by
fears of a fresh flare up in tensions on the Korean peninsula,
which knocked the won. 
    The South Korean won weakened as much as 0.4
percent to 1139.20 against the dollar, its lowest level since
Nov. 13, hit by reports that North Korea is considering
suspending nuclear talks with the United States.
    The news comes after the failed summit last month between
U.S. President Donald Trump and North Korean leader Kim Jong Un
in Vietnam. 
    "If North Korea does pull out of talks, that will bring
geopolitical concerns in the Korean peninsula back on the table.
We will see Korean assets starting to price in geopolitical risk
elements," Khoon Goh, head of Asia research at ANZ Banking Group
(Singapore) said.
    Much of the rest of emerging Asia drew some relief as
Chinese Vice Premier Liu He said he spoke by telephone with U.S.
Treasury Secretary Steven Mnuchin and U.S. Trade Representative
Robert Lighthizer, with the two sides making further substantive
progress on trade talks.
    The overall gains, however, were capped by uncertainty over
when the two economic powers would reach an agreement.
    The Singapore dollar edged higher and was set to gain
 for the week, while the Philippine peso dipped 0.1
percent against the dollar. 
    The Indonesian rupiah weakened as much as 0.3
percent, before paring some of the losses.
    Data showed the country posted a surprise trade surplus in
February, for the first time in five months, as imports
unexpectedly fell sharply.
    Southeast Asia's largest economy has been struggling to
reduce its trade deficit, which hit a record high of $8.5
billion last year.
    "The fact that Indonesia managed to turn the large trade
deficit into a small surplus has seen the rupiah recover
somewhat," Goh said.
    However, he noted that Indonesia is still running a current
account deficit, and weak trade numbers from across Asia, were
factors that would continue to weigh on the currency.   
    The Indian rupee strengthened as much as 0.4
percent to 69.10 on the dollar, and is set to gain for a fifth
consecutive week.
    Investors have regained some of their lost appetite for
emerging Asia's worst performing currency in 2018, when it
tumbled more than 8 percent.
    A Reuters poll showed investors are bullish on the rupee for
the first time in nearly a year, as a recent surge in popularity
of the country's ruling party is expected to bode well for its
alliance in the upcoming national elections.
    "The rupee continues to remain on appreciating mode due to
foreign institutional investors inflow in the debt and equity
market," Rushabh Maru, a currency and commodity analyst at Anand
Rathi Shares and Stock Brokers Ltd said.
    "Crude oil prices are stable and hence inflation is expected
to remain benign in coming months." 
    The following table shows rates for Asian currencies against
the dollar at 0616 GMT.
 Currency               Latest bid  Previous day  Pct Move
 Japan yen              111.640     111.7         +0.05
 Sing dlr               1.355       1.3556        +0.07
 Taiwan dlr             30.890      30.901        +0.04
 Korean won             1137.900    1134.8        -0.27
 Baht                   31.720      31.76         +0.13
 Peso                   52.730      52.68         -0.09
 Rupiah                 14285.000   14262         -0.16
 Rupee                  69.198      69.35         +0.22
 Ringgit                4.088       4.089         +0.02
 Yuan                   6.719       6.7240        +0.07
 Change so far in 2019                            
 Currency               Latest bid  End 2018      Pct Move
 Japan yen              111.640     109.56        -1.86
 Sing dlr               1.355       1.3627        +0.59
 Taiwan dlr             30.890      30.733        -0.51
 Korean won             1137.900    1115.70       -1.95
 Baht                   31.720      32.55         +2.62
 Peso                   52.730      52.47         -0.49
 Rupiah                 14285.000   14375         +0.63
 Rupee                  69.198      69.77         +0.83
 Ringgit                4.088       4.1300        +1.03
 Yuan                   6.719       6.8730        +2.29

 (Reporting by Shriya Ramakrishnan in Bengaluru
Editing by Shri Navaratnam)
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