January 17, 2018 / 6:50 AM / 7 months ago

EM ASIA FX-Asian currencies skid on dollar recovery; peso extends fall

 (Adds text, updates prices)
    By Patturaja  Murugaboopathy 
    Jan 17 (Reuters) - Most Asian currencies slipped on
Wednesday as the dollar rebounded from a three-year low, with
the Philippine peso shedding half a percent on concerns
of widening trade deficit.
    The dollar index against a basket of six major currencies
 was up 0.2 percent at 90.569 after hitting its lowest 
since December 2014 at 90.113.
    The peso extended its fall to its lowest in more than a
month on higher dollar buying by corporates on Wednesday.

    Data out last week showed the Philippines' trade deficit
rose to a record of $3.78 billion in November, putting the
nation on track for its first annual current account deficit in
15 years.
    The Indian rupee jumped more than a quarter 
percent on news that the government has cut its additional
market borrowing requirement by 60 percent for the current
fiscal year.
    The news sent benchmark 10-year bond yields down by 15 basis
points. Indian bond yields have risen by more than 100 basis
points since June last year on concerns that the government may
overshoot its fiscal deficit target.
    The South Korean won was down 0.5 percent on the
    Finance Minister Kim Dong-yeon said authorities will leave
foreign exchange rates to market participants but take action if
    The won gained more than 12 percent in 2017, making it the
top performer among Asian currencies against the dollar.
    The Thai baht was flat on the day, after having
gained 2 percent this year.
    The central bank governor said on Wednesday that the bank
has found "unusual speculation" in the baht from some local
financial institutions, but noted recent strength in the
currency is expected to have only a limited impact on exports.

    The Malaysian ringgit climbed on higher oil prices,
before giving up some of its gains as the dollar recovered.
    Some analysts said they expect markets to be cautious ahead
of key events such as Germany's Social Democrat (SPD), European
Central bank and Bank of Japan meetings later in the month.
    The Cboe Volatility Index, often referred to as Wall
Street's "fear index", jumped to a six-week high on Wednesday.
    A higher index reflects dampening risk sentiment which
undermines regional currencies.
    However, Khoon Goh, head of Asia research at ANZ Banking
Group, is bullish on the outlook for Asian currencies.
    "Normally a rise in volatility tends to be a negative for
Asian currencies, but in the current environment, we are seeing
bigger period of dollar weakness that is more than offsetting
the rise in the VIX," Goh said.
    China's yuan was flat after rising earlier in the
day, as the central bank set its firmest midpoint in more than
two years.
    The following table shows rates for Asian currencies against
the dollar at 0611 GMT.
 Change on the day at 0611 GMT
  Currency               Latest bid  Previous day  Pct Move
  Japan yen              110.790     110.44        -0.32
  Sing dlr               1.323       1.3207        -0.20
  Taiwan dlr             29.543      29.555        +0.04
  Korean won             1067.700    1062.7        -0.47
  Baht                   31.984      31.95         -0.11
  Peso                   50.740      50.49         -0.49
  Rupiah                 13347.000   13337         -0.07
  Rupee                  63.960      64.03         +0.11
  Ringgit                3.950       3.954         +0.10
  Yuan                   6.436       6.4369        +0.02
  Change so far in 2018                            
  Currency               Latest bid  End 2017      Pct Move
  Japan yen              110.790     112.67        +1.70
  Sing dlr               1.323       1.3373        +1.05
  Taiwan dlr             29.543      29.848        +1.03
  Korean won             1067.700    1070.50       +0.26
  Baht                   31.984      32.58         +1.86
  Peso                   50.740      49.93         -1.60
  Rupiah                 13347.000   13565         +1.63
  Rupee                  63.960      63.87         -0.14
  Ringgit                3.950       4.0440        +2.38
  Yuan                   6.436       6.5069        +1.10
 (Reporting by Patturaja Murugaboopathy in Bengaluru; Editing by
Subhranshu Sahu)
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