January 25, 2018 / 6:08 AM / 10 months ago

EM ASIA FX-Asian currencies firm, baht at more than 4-year high

    * Chinese yuan at highest since Nov 2015
    * Thai baht at over 4-year high
    * S.Korean won up 1 pct, shrugs off economic contraction

 (Adds details, updates prices)
    By Ambar Warrick
    Jan 25 (Reuters) - Asian currencies rallied against the
dollar on Thursday, as the greenback went into a tailspin after
comments from the U.S. Treasury secretary hinted of a paradigm
shift in the currency policy of the world's largest economy.  
    U.S. Treasury Secretary Steven Mnuchin welcomed a weaker
currency at the the World Economic Forum in Davos, saying that
"obviously a weaker dollar is good for us as it relates to trade
and opportunities," which was seen as a departure from
traditional U.S. currency policy. 
    The dollar stood at a more than three-year low
against a basket of currencies. 
    "This (fall in the dollar) resulted from U.S. Treasury
Mnuchin's endorsement of a weaker dollar by suggesting it is
good for U.S. trade," Mizuho said in a research note. 
    Asian currencies as such, benefited from the weaker
greenback, with a slew of gains across multiple regions.
    The South Korean won shot up over one percent
against the dollar, making it the best performing Asian currency
for the day, despite central bank data showing that the
country's economy contracted in the fourth quarter.
    South Korea's economy posted its worst performance since
2008 in the last quarter as struggling car exporters and
industrial production failed to keep up the previous quarter's
dashing pace.
    The Thai baht rose to a more than four-year high
against the dollar, while the Chinese yuan stood at a
more than two-year high.
    The Malaysian ringgit rose about 0.3 percent to a
near two-year peak against the dollar. The currency was on track
for its fifth straight session of gains.
    Malaysia's central bank is expected to raise its benchmark
interest rate for the first time in 3-1/2 years on Thursday, a
Reuters poll showed. Growth momentum has picked up in recent
months, and economists expect there is a window now for the
central bank to "normalise" its key rate before elections that
must be held by August.
    "Other positive signs in the economy, together with a mild
inflation pick-up makes the likelihood of a rate hike by the
central bank today increasingly more likely," OCBC Bank said in
a research note.
    The following table shows rates for Asian currencies against
the dollar on Thursday at 0134 GMT.
 CURRENCIES VS U.S.                                     
 Change on the day at   0537 GMT                        
 Currency                     Latest bid  Previous day  Pct Move
 Japan yen                    109.030     109.21        +0.17
 Sing dlr                     1.305       1.3070        +0.12
 Taiwan dlr                   29.074      29.302        +0.78
 Korean won                   1060.200    1070.2        +0.94
 Baht                         31.390      31.62         +0.73
 Peso                         50.790      50.96         +0.33
 Rupiah                       13275.000   13311         +0.27
 Rupee                        63.523      63.69         +0.26
 Ringgit                      3.899       3.911         +0.31
 Yuan                         6.329       6.3590        +0.47
 Change so far in 2018                                  
 Currency                     Latest bid  End 2017      Pct Move
 Japan yen                    109.030     112.67        +3.34
 Sing dlr                     1.305       1.3373        +2.44
 Taiwan dlr                   29.074      29.848        +2.66
 Korean won                   1060.200    1070.50       +0.97
 Baht                         31.390      32.58         +3.79
 Peso                         50.790      49.93         -1.69
 Rupiah                       13275.000   13565         +2.18
 Rupee                        63.523      63.87         +0.55
 Ringgit                      3.899       4.0440        +3.72
 Yuan                         6.329       6.5069        +2.81

 (Reporting by Ambar Warrick in Bengaluru; Editing by Jacqueline
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