April 30, 2018 / 6:32 AM / 2 years ago

EM ASIA FX-Asian currencies firm on easing Korean tensions, slip in U.S. yields

 (Adds text, updates prices)
    By Patturaja  Murugaboopathy 
    April 30 (Reuters) - Asian currencies rose against the
dollar on Monday as tensions in the Korean Peninsula eased and a
pullback in U.S. Treasury yields increased the appeal of risky
    The U.S. 10-year Treasury yield, which lifted
the dollar over the past two weeks by breaching the
psychologically important level of 3 percent, was hovering near
a one week low touched on Friday.
    "Three percent could be a sticky level for the U.S. 10-year
Treasury yield as demand for the higher-yielding 10-year
treasuries could continue to cap yield gains, which would in
turn cap the dollar as well," said Saktiandi Supaat, head of FX
research at Maybank in Singapore, in a report.
    Traders said liquidity was low on Monday with Japan, China
and India on holiday and much of Asia closed on Tuesday.
    The South Korean won rose 1 percent on signs of
easing political tensions in the Korean Peninsula, following a
historic summit between the leaders of North Korea and South
    The Philippine peso rose on optimism over S&P's upgrading
its outlook for Philippine sovereign rating to positive, while
the Thai baht also gained over a quarter percent.
    The peso was set to post its first monthly gain in four
    The Malaysian ringgit was marginally down as
investors trimmed their positions in local markets on looming
election risks.
    "While the Barisan Nasional (BN) alliance is expected to
maintain its majority in parliament, the results of the state
elections are also important because if more states are won by
the opposition it would be negative for the ringgit," Bank of
Tokyo-Mitsubishi UFJ said in a report. 
    Events and data scheduled for this week include the U.S
Federal Reserve's May 1-2 policy meeting, at which the central
bank is widely expected to keep interest rates unchanged, as
well as U.S. jobs data due on Friday.
    "Any dovish-leaning rhetoric from the Fed or slowdown in
pace of core personal consumption expenditure (PCE) and/or wage
growth may help slow the pace of UST yield increases and cushion
against the dollar strength," said Maybank's Supaat.
    A delegation of top U.S. economic and trade advisers is due 
 in China for negotiations. Some analysts are optimistic that
the talks would mitigate concerns over a trade war. 
    "Positive headlines would reduce risks of an outright trade
war, in our view, and could raise expectations for yuan
appreciation," Nomura said in a report.
    Most Asian currencies were set to end the month lower
against the dollar thanks to a surge in U.S Treasury yields. 
    The Japanese yen has fallen 2.6 percent, its biggest
drop in 17 months, while the Indian rupee also fell over 2
     The following table shows rates for Asian currencies
against the dollar at 0555 GMT.
   Change as of  0555                           
  Currency               Latest  Previous    Pct
                            bid       day   Move
  Japan yen             109.130    109.03  -0.09
  Sing dlr              1.323      1.3235  +0.06
  Taiwan dlr            29.550     29.636  +0.29
  Korean won            1067.30    1076.6  +0.87
  Baht                  31.510      31.59  +0.25
  Peso                  51.670     51.965  +0.57
  Rupiah                13880.0     13885  +0.04
  Ringgit               3.918       3.917  -0.03
       *yuan and rupee                          
    markets closed for                     
  Change so far in                              
  Currency              Latest   End 2017    Pct
                        bid                 Move
  Japan yen             109.130    112.67  +3.24
  Sing dlr              1.323      1.3373  +1.10
  Taiwan dlr            29.550     29.848  +1.01
  Korean won            1067.30   1070.50  +0.30
  Baht                  31.510      32.58  +3.40
  Peso                  51.670      49.93  -3.37
  Rupiah                13880.0     13565  -2.27
  Rupee                 66.660      63.87  -4.19
  Ringgit               3.918      4.0440  +3.22
  Yuan                  6.331      6.5069  +2.78
 (Reporting by Patturaja Murugaboopathy in Bengaluru; Additional
Reporting  by Gaurav Dogra 
Editing by Eric Meijer)
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