May 21, 2018 / 6:15 AM / 3 months ago

EM ASIA FX-Asian currencies slip as easing U.S.-China trade tensions support dollar

    * Indonesian rupiah extends fall, remains around 2-1/2 yr
lows  
    * India's rupee falls to lowest since Jan 2017
    * Thai GDP beats expectations; baht slips 

 (Adds text, updates prices)
    By Nikhil Nainan
    May 21 (Reuters) - Asian currencies weakened against the
dollar on Monday, which touched a new 2018 peak as signs of
easing trade tensions between the United States and China
supported the greenback against its peers.
    U.S. Treasury Secretary Steven Mnuchin and President Donald
Trump's top economic adviser, Larry Kudlow, said an agreement
reached by Chinese and American negotiators on Saturday sets up
a framework for addressing trade imbalances in the future.

    Mnuchin's reference to trade tensions between the world's
two largest economies being "on hold" supported wider risk
sentiment as well as the dollar.
    "The latest statement on the China-U.S. trade suggests both
parties are happy to avoid the dreaded tit-for-tat escalation
while working towards a more market-friendly bilateral trade
agreement," said Stephen Innes, head of trading in Asia-Pacific
for Oanda.
    However, the easing trade tensions between U.S. and China,
while welcome, is unlikely to eclipse the other factors weighing
on emerging market currencies, DBS said in a note, as oil prices
continue to rise and U.S. Treasury yields remain high.

    Indonesia's rupiah extended losses, falling a further
0.3 percent, continuing its decline after last week's interest
rate hike failed to support the currency.
    "If Indonesian rupiah pressures mount, this may prompt new
measures from policymakers aimed at stabilising the rupiah,
including further adjustment in rates," said Mizuho Bank in a
note.
    The country's central bank plans to conduct three foreign
exchange swaps this week to ensure liquidity, according to a
senior bank official.
    The South Korean won slipped 0.8 percent to 1,086
per dollar, ahead of the country's central bank's policy meeting
later in the week.
    The Indian rupee slipped to 68.08 against the
dollar, its lowest since January 2017. 
    Rising oil prices look set to add to India's already
widening trade deficit, and have kept investors bearish on the
rupee.

    THAILAND'S BAHT
    Thailand's baht slipped against the dollar, despite
data showing the economy growing well above estimates in the
first quarter of the year.
    Nath Wongsaroj, corporate treasury trader at Mizuho Bank,
said the dollar's bullishness overshadowed the better than
expected gross domestic product data.
    Last week, the Bank of Thailand held its benchmark rate at a
near record low to support economic growth.

CURRENCIES VS U.S. DOLLAR
 Change on the day at 0520 GMT                          
 Currency                     Latest bid  Previous day  Pct Move
 Japan yen                    111.260     110.74        -0.47
 Sing dlr                     1.345       1.3426        -0.17
 Taiwan dlr                   29.980      29.912        -0.23
 Korean won                   1086.000    1077.6        -0.77
 Baht                         32.210      32.18         -0.09
 Peso                         52.347      52.279        -0.13
 Rupiah                       14197.000   14150         -0.33
 Rupee                        68.080      68.01         -0.11
 Ringgit                      3.974       3.97          -0.10
 Yuan                         6.381       6.3767        -0.07
 Change so far in 2018                                  
 Currency                     Latest bid  End 2017      Pct Move
 Japan yen                    111.260     112.67        +1.27
 Sing dlr                     1.345       1.3373        -0.57
 Taiwan dlr                   29.980      29.848        -0.44
 Korean won                   1086.000    1070.50       -1.43
 Baht                         32.210      32.58         +1.15
 Peso                         52.347      49.977        -4.53
 Rupiah                       14197.000   13565         -4.45
 Rupee                        68.080      63.87         -6.18
 Ringgit                      3.974       4.0440        +1.76
 Yuan                         6.381       6.5069        +1.97
 

 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Sam
Holmes)
  
 
 
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