March 27, 2018 / 6:51 AM / a year ago

EM ASIA FX-Asian currencies rise as risk appetite returns

 (Adds text, updates prices)
    By Patturaja  Murugaboopathy 
    March 27 (Reuters) - Asian currencies rose on Tuesday as
reports of talks between the United States and China soothed
investor concerns about a trade war, whetting their appetite for
riskier assets.
    Reflecting this improved sentiment, MSCI's broadest index of
Asia-Pacific shares outside Japan was up about 1
percent on Tuesday.
    Global risk sentiment slumped last week when U.S. President
Donald Trump moved to impose tariffs on Chinese goods with 
Beijing threatening to retaliate, risking a trade war or at
least threatening the synchronised recovery in the global
    On Monday, Premier Li Keqiang said China and the United
States should maintain negotiations, reiterating pledges to ease
access for American businesses.
    Andy Ji, a strategist for Commonwealth Bank of Australia in
Singapore, said markets were in a risk-on mode on Tuesday.
    "Markets are more optimistic for a regional trade deal and
evading the trade war," Ji said.
    Another positive for regional currencies was this week's 
sharp rise in China's yuan.
    The yuan extended its gains on the dollar to a seven-week
high on Tuesday after the central bank set its official fixing
at the strongest level in more than 2 1/2 years.
    "We believe China will tolerate more appreciation in the
yuan to help reduce its merchandise trade surplus with the
United States, particularly if the dollar index remains
subdued," Scotiabank said in a report. 
    The dollar's index against a basket of six major
peers held steady at 89.042, close to Monday's five-week low of
    The South Korean won led the regional gainers,
rising about 1 percent against the dollar. 
    Strong oil prices propelled the Malaysian ringgit to
a gain of more than 0.50 percent, while the Singapore dollar
 also edged higher.
    "The stronger ringgit will buoy the Singapore dollar,"
Vishnu Varathan, head of economics and strategy for Mizuho Bank
in Singapore said in a note.
    The Indian rupee was up 0.13 percent at 64.775 per
dollar, its highest in a month.
    The rupee's gain was driven by a surprise cut in the
government's borrowing programme for the fiscal year starting
    The government said on Tuesday it plans to borrow 2.88
trillion rupees ($44.45 billion) over  April-September, 22
percent lower than the amount for the same period last year.

    However some analysts said the relief for the Indian rupee
and bonds is temporary.
    "The fact remains that the government needs to borrow more
to finance a wider fiscal deficit," ING said in a report.
   "We expect fiscal slippages to remain among the main
headwinds for local financial assets, including government bonds
and the rupee this year."
    The following table shows rates for Asian currencies against
the dollar at 0604 GMT.

  Change as of  0604 GMT                              
  Currency                   Latest   Previous     Pct
                                bid        day    Move
  Japan yen                105.600       105.4   -0.19
  Sing dlr                 1.307        1.3085   +0.15
  Taiwan dlr               29.109       29.153   +0.15
  Korean won               1070.300     1081.1   +1.01
  Baht                     31.120        31.14   +0.06
  Peso                     52.180       52.215   +0.07
  Rupiah                   13713.00      13735   +0.16
  Rupee                    64.810        64.87   +0.08
  Ringgit                  3.871         3.894   +0.59
  Yuan                     6.261        6.2807   +0.32
  Change so far in 2018                               
  Currency                 Latest    End 2017      Pct
                           bid                    Move
  Japan yen                105.600      112.67   +6.70
  Sing dlr                 1.307        1.3373   +2.35
  Taiwan dlr               29.109       29.848   +2.54
  Korean won               1070.300    1070.50   +0.02
  Baht                     31.120        32.58   +4.69
  Peso                     52.180        49.93   -4.31
  Rupiah                   13713.00      13565   -1.08
  Rupee                    64.810        63.87   -1.45
  Ringgit                  3.871        4.0440   +4.47
  Yuan                     6.261        6.5069   +3.93
 (Reporting by Patturaja Murugaboopathy in Bengaluru
Editing by Eric Meijer)
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