August 2, 2019 / 5:52 AM / 2 months ago

EM ASIA FX-Asian currencies slide as Trump unveils more tariffs

    * Chinese yuan weakens 0.8% to 8-mth low
    * Indonesian cenbank intervenes as rupiah eases up to 0.8% 
    * S.Korean won at lowest level since Jan 2017

 (Adds text, updates prices)
    By Niyati Shetty
    Aug 2 (Reuters) - Most Asian currencies tumbled on Friday as
investors scrambled to safety after U.S. President Donald Trump
said he would slap more tariffs on Chinese goods, escalating
trade tensions.
    The Chinese yuan weakened up to 0.8% to 6.950,
inching closer to the psychologically crucial 7 per dollar mark.
The currency hit its lowest since late November 2018.
    Trump on Thursday said he would impose 10% tariffs on the
remaining $300 billion of Chinese imports starting Sept. 1,
marking an end to a temporary truce in a trade war between the
world's largest economies.
    "Trump's propensity to agitate with his inflated, if not
imagined hand, "holding all the cards", is a dangerous thing
given that global trade is a "house of cards" ... and China is
not about to fold," Vishnu Varathan, senior economist at Mizuho
Bank wrote in a note.
    Senior Chinese diplomat Wang Yi on Friday said the
additional tariffs were "not a correct way" to deal with the
bilateral dispute.
    The safe haven Japanese yen strengthened against the
dollar on Friday as market sentiment soured for riskier assets.

    The Taiwan dollar softened 0.5% to a six-week low,
while the Indian rupee eased 0.4%.
    The Malaysian ringgit weakened 0.2% as government
data showed exports fell, contrary to expectations for an
increase, as shipments to key markets tumbled.
    
    INDONESIA TO DEFEND RUPIAH
    The rupiah declined as much as 0.8% to 14,225 against
the dollar, its weakest level since June 20, prompting the
central bank to intervene. 
    Bank Indonesia on Friday said it would intervene in the spot
foreign exchange, domestic non-deliverable forward and bond
markets to stabilise the rupiah.
    "The depreciation was triggered by profit taking in the bond
market that we think is temporary, due to risk-off after the
U.S. applies more tariffs to China," a senior official said.
    
    TRADE TROUBLES DAMPEN WON
    The won slipped 0.7% on the dollar as tensions
with Japan compounded concerns for the trade-reliant economy.
The currency fell to its weakest since January 2017. 
    Tokyo said on Friday it would remove South Korea from its
easy-trade "white list", drawing the threat of a firm response
from Seoul. 
    Tensions between the U.S. allies escalated last month after
Japan tightened curbs on exports of high-tech materials to the
country. 
    South Korean authorities were suspected of selling dollars
to curb the won's fall, helping the currency cut some of its
losses, dealers told Reuters.
    
    The following table shows rates for Asian currencies against
the dollar at 0517 GMT.
    CURRENCIES VS U.S. DOLLAR
 Currency               Latest bid  Previous day  Pct Move
 Japan yen              107.090     107.33        +0.22
 Sing dlr               1.376       1.3767        +0.08
 Taiwan dlr             31.340      31.182        -0.50
 Korean won             1196.800    1188.5        -0.69
 Baht                   30.880      30.86         -0.06
 Peso                   51.350      51.29         -0.12
 Rupiah                 14215.000   14110         -0.74
 Rupee                  69.280      69.05         -0.33
 Ringgit                4.152       4.144         -0.19
 Yuan                   6.936       6.8979        -0.55
                                                  
 Change so far in 2019                            
 Currency               Latest bid  End 2018      Pct Move
 Japan yen              107.090     109.56        +2.31
 Sing dlr               1.376       1.3627        -0.94
 Taiwan dlr             31.340      30.733        -1.94
 Korean won             1196.800    1115.70       -6.78
 Baht                   30.880      32.55         +5.41
 Peso                   51.350      52.47         +2.18
 Rupiah                 14215.000   14375         +1.13
 Rupee                  69.280      69.77         +0.71
 Ringgit                4.152       4.1300        -0.53
 Yuan                   6.936       6.8730        -0.91
 
 (Reporting by Niyati Shetty in Bengaluru
Editing by Jacqueline Wong)
  
 
 
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