January 31, 2018 / 6:17 AM / in 9 months

EM ASIA FX-Asian currencies tick up on weak dollar, set to end Jan higher

 (Adds details, updates prices)
    * Thai baht set for best month since 2008
    * Chinese yuan set for best month since 1994

    By Ambar Warrick
    Jan 31 (Reuters) - Asian currencies posted modest gains on
Wednesday as caution ahead of the Federal Reserve decision due
later capped strength in regional units against the dollar after
U.S. President Donald Trump's State of the Union address.
    Regional currencies are set to post some of their best
monthly gains in years, thanks to the dollar's steep decline
over January as investors look at the prospect of central bank
policy tightening outside of the United States.
    Trump in his address on Thursday urged Republicans and
Democrats to work toward compromises on immigration and
infrastructure, and also said he hoped to improve infrastructure
in the country.
    However, his lack of commentary on the dollar may have
prompted further selling in the greenback, which was marginally
lower against a basket of currencies.
    "The dollar is slightly softer as Trump's State of the Union
speech did not make any mention of a strong dollar, which was
something he said last week at an interview in Davos," said
Christopher Wong, an FX strategist with Maybank.
    In Asia, the South Korean won led gains, rising
0.4 percent to the dollar. Asian currencies are usually quick to
pounce on dollar weakness, although apprehension over the Fed
meeting later in the day capped gains for the day.
    The won was on track to gain marginally in January, compared
with a 1.7 percent rise in the previous month.
   The Chinese yuan was mostly flat to the dollar,
but was on track for its best month of gains since 1994.
    Growth in the country's manufacturing sector however, slowed
more than expected in January to an 8-month low in the face of a
cooling property market and tighter pollution rules.

    The Taiwan dollar rose slightly against the dollar.
The island's economy is expected to have grown 2.5 percent in
the fourth quarter, according to Thomson Reuters data.
    The Malaysian ringgit did not trade on account of a
market holiday.
    The Indonesian rupiah rose about 0.3 percent to the
dollar, while the Thai Baht rose about 0.2 percent.
    Commodity exporters like Indonesia and Thailand have seen
their currencies benefit greatly over the past year due to an
uptick in commodity prices.
    The rupiah was set for its best month since September 2016,
while the baht was on track for its best month since 2008.
    The following table shows rates for Asian currencies against
the dollar as of 0559 GMT.
 CURRENCIES VS U.S. DOLLAR                              
 Change on the day at 0559 GMT                          
 Currency                     Latest bid  Previous day  Pct Move
 Japan yen                    108.67      108.76        0.08
 Sing dlr                     1.31        1.3113        0.13
 Taiwan dlr                   29.201      29.24         0.13
 Korean won                   1069.7      1073.6        0.36
 Baht                         31.34       31.41         0.22
 Peso                         51.3        51.42         0.23
 Rupiah                       13385       13430         0.34
 Rupee                        63.68       63.6          -0.13
 Yuan                         6.309       6.325         0.26
 Change so far in 2018                                  
 Currency                     Latest bid  End 2017      Pct Move
 Japan yen                    108.67      112.67        3.68
 Sing dlr                     1.31        1.3373        2.12
 Taiwan dlr                   29.201      29.848        2.22
 Korean won                   1069.7      1070.5        0.07
 Baht                         31.34       32.58         3.96
 Peso                         51.3        49.93         -2.67
 Rupiah                       13385       13565         1.34
 Rupee                        63.68       63.87         0.3
 Yuan                         6.309       6.5069        3.14

 (Reporting by Ambar Warrick in Bengaluru; Editing by Sam
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