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EM ASIA FX-Asian currencies rise as dollar slips on yields, tax bill uncertainty
November 7, 2017 / 6:52 AM / a month ago

EM ASIA FX-Asian currencies rise as dollar slips on yields, tax bill uncertainty

 (Adds text, updates prices)
    By Patturaja  Murugaboopathy 
    Nov 7 (Reuters) - Emerging Asian currencies rebounded on
Tuesday as a dollar rally lost some steam on lower U.S. Treasury
yields and investors were sceptical that the U.S. Congress will
quickly pass a major tax bill.
    The dollar index, measuring it against a basket of
six major currencies, was trading a little lower at 94.726,
slipping from a 10-day peak of 95.077 reached on Monday. 
   "The momentum in stronger dollar has slowed down somewhat,
that is what supporting Asian currencies right now," said Sim
Moh Siong, FX strategist at Bank of Singapore. 
    "The global growth story continues to be a positive for
Asian currencies."
    The South Korean won led the regional currencies'
gains on the day, after a slump on Monday. 
    However, investors were wary of a possible escalation in
political tensions that could affect the won and other regional
currencies, with U.S. President Donald Trump visiting South
Korea on Tuesday.
    Trump is on a 12-day tour in Asia, covering five Asian
countries, to discuss trade policies and North Korea.
    Given tensions over North Korea, the dollar-yen should
remain a bit weak this week despite the Bank of Japan's doggedly
dovish efforts to weaken the yen, Stephen Innes, head of trading
in Asia-Pacific for Oanda in Singapore, said in a report.
    Crude oil prices, hovering near two-year highs, helped the
Malaysian ringgit strengthen on Tuesday. Energy exports
contribute significantly to Malaysia's gross domestic product.
    Sustained foreign interest propped up the Philippine peso
, with foreigners buying over $30 million in
Philippine equities so far this month.
    Bucking Tuesday's trend, the Indian rupee weakened,
at one point dropping as much of 0.3 percent due to dollar
demand from oil importers. 
    Overall, uncertainty related to U.S. tax reforms kept the
dollar in check on the day. Still, Bank of Singapore's Sim said
he is positive on the greenback for the rest of the year.
    "Some parts of the U.S. tax plan will get through, that
should be a dollar positive. That in turn means that the dollar
will likely stay firm against Asian currencies." he said.
    
    CHINA'S YUAN
    China's yuan was up 0.2 percent against the
dollar after the central bank's slightly stronger midpoint
fixing on Tuesday.
    Data on October foreign exchange reserves is expected to be
released later in the day. A Reuters poll showed the reserves
were expected to have risen for a ninth month, to $3.118
trillion. 
    On Monday, Reuters reported Goldman Sachs is
partnering with sovereign fund China Investment Corp (CIC) to
jointly launch an up to $5 billion fund to invest in U.S.
manufacturers.
    The partnership is seen to spur further progression on
capital flows and foreign investments, Maybank said in a report.
    On Monday, China's foreign exchange regulator said
cross-border flows stabilised in the first three quarters and
the foundation for a steady balance of international payments
will become more solid.
    

    The following table shows rates for Asian currencies against
the dollar at 0554 GMT.
    CURRENCIES VS U.S. DOLLAR
    
    
  Change on the day                                   
    at   0554 GMT                            
  Currency               Latest    Previous   Pct Move
                            bid         day  
  Japan yen           113.95         113.68      -0.24
  Sing dlr            1.3624         1.3613      -0.08
  Taiwan dlr          30.164         30.204      +0.13
  Korean won          1111             1115      +0.33
  Baht                33.146          33.14      -0.02
  Peso                51.200          51.28      +0.16
  Rupiah              13509           13523      +0.10
  Rupee               64.79           64.68      -0.18
  Ringgit             4.226            4.23      +0.09
  Yuan                6.624          6.6339      +0.15
                                                      
  Change so far in                                    
 2017                                        
  Currency            Latest     End 2016     Pct Move
                      bid                    
  Japan yen           113.95         117.07      +2.74
  Sing dlr            1.3624         1.4490      +6.36
  Taiwan dlr          30.164         32.279      +7.01
  Korean won          1111          1207.70      +8.67
  Baht                33.146          35.80      +8.01
  Peso                51.200          49.72      -2.89
  Rupiah              13509           13470      -0.29
  Rupee               64.790          67.92      +4.83
  Ringgit             4.226          4.4845      +6.12
  Yuan                6.624          6.9467      +4.87
 

 (Reporting by Patturaja Murugaboopathy in Bengaluru; Editing by
Richard Borsuk)
  
 
 

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