September 29, 2017 / 7:09 AM / 9 months ago

EM ASIA FX-Asian currencies rebound as dollar take breather from rally

 (Adds text, updates prices)
    By Patturaja  Murugaboopathy 
    Sept 29 (Reuters) - Asian currencies bounced modestly on
Friday as the dollar took a breather from a strong rally, though
most were set for monthly declines in a reflection of a
resurgent greenback riding on U.S. rate hike expectations and
the Trump administration's tax plan.
    The Indonesian rupiah led the regional gainers on
the day, while the South Korean won, the Philippine
peso and Indian rupee all advanced more than
quarter of a percent.
    "There is a little bit of profit taking in dollar," said
Stephen Innes, head of trading in Asia-Pacific for Oanda in
    For the week, the dollar index, which measures the
greenback against a basket of six major currencies, has gained
1.1 percent, putting it on track for its biggest weekly gain
since December.
    Over the month, the Indian rupee and Japanese yen fell
more than 2 percent each, while the South Korean won,
China's yuan and Indonesian rupiah have lost about 1
percent or more.
    Some local news also lent support to regional currencies on
the day.
    On Thursday, India's federal government said it stuck to its
budgeted market borrowing target for the fiscal year ending
March 2018, which cleared concerns of a fiscal deficit
    Also India's central bank said it would raise the limit for
foreign investments in government bonds by 80 billion rupees for
the October-December quarter. Foreign investments in Indian debt
markets were close to hitting statutory investment limits,
stoking fears it would slow bond investments by foreigners.
    Investors were positive on the Thai baht, on hopes
for solid trade data for this month after strong custom-cleared
export figures in August.
    Earlier in the week, Thailand's central bank raised its
forecasts for 2017 economic growth and exports on Wednesday.

    The South Korean won and other regional currencies pulled
ahead on the day, partly as North Korean tensions simmered down
a little during the week.
    However, China's yuan fell after its central bank lowered
the official yuan midpoint for the fifth straight day.
    U.S. bond yields jumped on the Federal Reserve's signal it
is on track to raise rates again in December and President
Donald Trump's tax proposal, reducing the appeal of regional
currencies. Regional exchange data showed foreign investors
pared their holdings in Asian equities and bond markets this
    However, Nizam Idris, head of strategy, fixed income and
currencies at Macquarie Bank, said U.S. tax reform is not such a
bad thing for Asia as demand from the U.S. will rise, which
would benefit Asian exports.
    "For the rest of the year, you need to split it (Asian
currencies) into two groups," said Macquaire Bank's Idris.
    "Currencies of exporting economies like Korean won, Taiwan
dollar, Singapore dollar will do well. But currencies which are
driven by bond flows will weaken."

    The following table shows rates for Asian currencies against
the dollar at 0617 GMT.
  Change on the day                               
   at   0617 GMT                         
  Currency             Latest  Previous   Pct Move
                          bid       day  
  Japan yen          112.68      112.33      -0.31
  Sing dlr           1.3589      1.3576      -0.10
  Taiwan dlr         30.360      30.405      +0.15
  Korean won         1146        1149.1      +0.29
  Baht               33.350        33.4      +0.15
  Peso               50.850       50.98      +0.26
  Rupiah             13470        13510      +0.30
  Rupee              65.43        65.50      +0.11
  Ringgit            4.227         4.23      +0.07
  Yuan               6.676       6.6570      -0.29
  Change so far in                                
  Currency           Latest    End 2016   Pct Move
  Japan yen          112.68      117.07      +3.90
  Sing dlr           1.3589      1.4490      +6.63
  Taiwan dlr         30.360      32.279      +6.32
  Korean won         1146       1207.70      +5.40
  Baht               33.350       35.80      +7.35
  Peso               50.850       49.72      -2.22
  Rupiah             13470        13470      +0.00
  Rupee              65.430       67.92      +3.81
  Ringgit            4.227       4.4845      +6.09
  Yuan               6.676       6.9467      +4.05
 (Reporting by Patturaja Murugaboopathy and Additional Reporting
by Gaurav Dogra in Bengaluru; Editing by Shri Navaratnam)
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