August 29, 2018 / 6:53 AM / 3 months ago

EM ASIA FX-Asian currencies fall as dollar recovers, China trade issues back in focus

 (Adds details on yuan, rupee and baht)
    Aug 29 (Reuters) - Asian currencies weakened on Wednesday as
investors booked profits on gains made earlier this week, but
investors remain cautious as the Sino-U.S. trade dispute looks
set to dominate headlines in the week ahead.
    Currencies in the region found support after an agreement
between the United States and Mexico to overhaul NAFTA supported
risk appetite, but analysts doubt a similar outcome for ties
between Washington and Beijing.
    Focus is now shifting to the Sept. 5 deadline for public
comment on U.S. President Donald Trump's increased tariffs on
$200 billion of Chinese goods.
    "A 'win' for NAFTA (regardless of the details) provides U.S.
a stronger position to come down harder on China," noted
Saktiandi Supaat, head of FX research at Maybank. 
    "The lead up to U.S. trade decision warrants a cautious take
on risk sentiment. The dollar may see some near term support as
a result."
    The dollar recovered against Asian currencies on Wednesday
after dipping to a four-week low overnight.
    The Thai baht dropped 0.5 percent on dollar short
covering by traders and higher demand for the greenback from
importers. 
    The Indian rupee hit a record low against the
dollar on Wednesday, pulled down by a rise in U.S. Treasury
yields and a strong month-end dollar demand back home. The
Reserve Bank of India likely sold dollars, though the force was
mild, according to two senior forex officials at state-run
banks.
    China's yuan also weakened, snapping a three-day winning
streak, pulled lower by rising corporate demand for cheaper
dollars.
    The dollar index against a basket of six major
currencies inched higher, after trading as low as 94.434 during
the U.S. session, its lowest since July 31.
    "Although U.S. dollar weakness may start to ease, we
continue to see positive cues for EM Asian currencies from the
RMB complex, risk sentiments and portfolio flows," noted Terence
Wu, FX strategist at OCBC Bank in Singapore.  
    Overseas investors have bought a net $1.2 billion of Asian
stocks so far this month, after their purchases of $293 million
in July, data from seven stock exchanges showed.
    
    The following table shows rates for Asian currencies against
the dollar at 0603 GMT.
    CURRENCIES VS U.S. DOLLAR

    
   Change as of  0603                            
          GMT                               
  Currency                Latest  Previous    Pct
                             bid       day   Move
  Japan yen              111.150    111.18  +0.03
  Sing dlr               1.365      1.3636  -0.12
  Taiwan dlr             30.708     30.724  +0.05
  Korean won             1110.70      1110  -0.06
                         0                  
  Baht                   32.700      32.54  -0.49
  Peso                   53.340     53.325  -0.03
  Rupiah                 14640.0     14617  -0.16
                         00                 
  Rupee                  70.455      70.10  -0.50
  Ringgit                4.101       4.095  -0.15
  Yuan                   6.819      6.8030  -0.24
                                                 
  Change so far in 2018                          
  Currency               Latest   End 2017    Pct
                         bid                 Move
  Japan yen              111.150    112.67  +1.37
  Sing dlr               1.365      1.3373  -2.05
  Taiwan dlr             30.708     29.848  -2.80
  Korean won             1110.70   1070.50  -3.62
                         0                  
  Baht                   32.700      32.58  -0.37
  Peso                   53.340      49.93  -6.39
  Rupiah                 14640.0     13565  -7.34
                         00                 
  Rupee                  70.455      63.87  -9.35
  Ringgit                4.101      4.0440  -1.39
  Yuan                   6.819      6.5069  -4.58
 
 (Reporting by Patturaja Murugaboopathy in Bengaluru; Additional
Reporting by Gaurav Dogra; Editing by Sam Holmes)
  
 
 
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