May 25, 2018 / 6:43 AM / a month ago

EM ASIA FX-Asian currencies tentative as Trump stokes North Korea uncertainty

    * Indian rupee set for 7th weekly loss
    * South Korean won edges up, eyes on U.S.-North Korea
developments
    * Philippine peso slips after c.bank cuts bank reserve ratio

 (Adds text, updates prices)
    By Nikhil Nainan
    May 25 (Reuters) - Emerging Asian currencies were tentative
on Friday as investors grappled with a range of factors,
including easing oil prices, retreating U.S. bond yields and
U.S. President Donald Trump's decision to scrap a planned summit
with North Korea's leader.
    Khoon Goh, head of Asia research for ANZ, said the pull back
in U.S. bond yields and lower oil prices have helped "stabilise
Asian currencies somewhat today." 
     Market sentiment remained fragile after Trump abruptly
called off a planned summit with North Korean leader Kim Jong Un
in June.
     However, conciliatory comments from North Korean Vice
Foreign Minister Kim Kye Gwan helped to ease fears of a renewed
escalation in tension on the Korean peninsula.
    Against a basket of six other currencies, the dollar index
 added 0.2 percent to 93.907. In overnight trade, U.S.
Treasury yields fell on safety buying.
    South Korea's won pushed up 0.2 percent at
1077.3.
    "Dollar-won has also retraced its initial surge to 1,085,
but markets could stay cautious over potential outflows as the
geopolitical risk premium is repriced higher for Korean assets,"
Mizuho bank said in a note.
    The Singapore dollar dipped 0.1 percent. 
    
   PHILIPPINE PESO
    The Philippine peso slipped 0.1 percent to 52.519
against the dollar, a day after the country's central bank cut
banks' reserve ratio.
    The 1 percentage point cut is expected to add around 100
billion pesos ($1.90 billion) in liquidity to the financial
system, analysts said, in turn putting more pressure on the peso
which hit fresh 12-year lows earlier Friday.
    "The RRR cut is designed to replace some of the liquidity
lost through the Bangko Sentral ng Pilipinas intervention, so
it's not seen as an easing" in monetary policy, ANZ's Goh said. 
    "The external position is the main driver for the peso
weakness for the time being and it's not expected to change
anytime soon." 
    
    INDIAN RUPEE 
    The Indian rupee was a shade firmer at 68.245, as
oil prices fell further from the November 2014 high's of $80 per
barrel touched last week, providing some relief to the world's
third largest importer of oil. 
    "The rupee has been hit hard in the last few weeks, but we
are seeing a bit of a respite on the back of (lower) oil
prices," Goh said.
    However, "the external account pressure will continue"
remains a risk for the rupee and will act as a dampener, he
said.
    The rupee is on course to weaken for a seventh straight
week. 
       
 CURRENCIES VS U.S. DOLLAR
 Change on the day at 0542 GMT                          
 Currency                     Latest bid  Previous day  Pct Move
 Japan yen                    109.570     109.24        -0.30
 Sing dlr                     1.341       1.3390        -0.12
 Taiwan dlr                   29.912      29.930        +0.06
 Korean won                   1077.300    1079.6        +0.21
 Baht                         32.000      32.03         +0.09
 Peso                         52.519      52.482        -0.07
 Rupiah                       14150.000   14130         -0.14
 Rupee                        68.245      68.34         +0.14
 Ringgit                      3.983       3.979         -0.09
 Yuan                         6.389       6.3770        -0.18
 Change so far in 2018                                  
 Currency                     Latest bid  End 2017      Pct Move
 Japan yen                    109.570     112.67        +2.83
 Sing dlr                     1.341       1.3373        -0.25
 Taiwan dlr                   29.912      29.848        -0.21
 Korean won                   1077.300    1070.50       -0.63
 Baht                         32.000      32.58         +1.81
 Peso                         52.519      49.977        -4.84
 Rupiah                       14150.000   13565         -4.13
 Rupee                        68.245      63.87         -6.41
 Ringgit                      3.983       4.0440        +1.54
 Yuan                         6.389       6.5069        +1.85
 

 (Reporting by Nikhil Kurian Nainan in Bengaluru
Editing by Shri Navaratnam)
  
 
 
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