November 29, 2019 / 6:49 AM / 3 months ago

EM ASIA FX-Asian currencies trapped in tight range amid Sino-U.S. trade deal doubts

    * Philippine peso top performer of the week
    * Ringgit poised for third weekly decline
    * S.Korean won weakens, cenbank keeps rates  

 (Adds text, updates prices)
    By Shriya Ramakrishnan
    Nov 29 (Reuters) - Emerging Asian currencies were stuck in a
tight range on Friday as investors fretted whether a new U.S.
law backing Hong Kong protesters could derail trade negotiations
between Washington and Beijing.
    U.S. President Donald Trump on Wednesday signed into law
Congressional legislation backing the protesters, prompting
Beijing to warn of "firm counter measures".
    China's yuan eked out marginal gains against the
dollar in thin trade, while the Thai baht was largely
flat ahead of the release of October trade data.
    The South Korean won weakened 0.2% to the dollar,
after the central bank left interest rates unchanged at 1.25%,
as expected, and trimmed its growth and inflation forecasts for
the year, cementing a case for more policy easing next year.

    "A cut to 1.0% would start to raise questions about whether
the central bank is approaching the limits of what can be
achieved through conventional policy," Alex Holmes, Asia
economist at Capital Economics, said in a note. 
    Market focus will now shift to China's factory activity
data, due on Saturday, which is expected to have contracted for
a seventh straight month in November amid sluggish domestic
demand, a Reuters poll showed.
    The Indonesian rupiah eased 0.2%, while the Malaysian
ringgit ticked higher but was poised for a third straight
weekly fall. 
    The Indian rupee dipped 0.2% ahead of the release of
economic growth figures for the July-September quarter.
    A Reuters poll showed the economy probably expanded at its
weakest pace in more than six years in the last quarter, hurt by
a slowdown in consumer demand and private investment.

    The peso strengthened as much as 0.2% before erasing
gains, but remained on track for a weekly gain of 0.2%, making
it the region's top performing currency for the week.
    Earlier this week, local media quoted here
 Bangko Sentral ng Pilipinas Governor Benjamin Diokno as saying
another rate cut was still possible during the year's last
policy meeting in December. 
    The economy clocked surprisingly stronger growth in the
third quarter, giving the central bank more leeway to stand pat
on interest rate cuts after a 75 basis point cut in total this
    "Should inflation data for November defy market expectations
and point to a marked slowdown, that could prompt the central
bank to resume its monetary easing at its next policy decision,"
said Han Tan, a market analyst at FXTM. 
    Rising real yields and a narrowing trade deficit have
largely propped up the peso so far this quarter, Tan added. 

 Change on the day at   0639 GMT                  
 Currency               Latest bid  Previous day  Pct Move
 Japan yen              109.490     109.5         +0.01
 Sing dlr               1.366       1.3656        -0.03
 Taiwan dlr             30.505      30.505        +0.00
 Korean won             1181.200    1179          -0.19
 Baht                   30.220      30.232        +0.04
 Peso                   50.830      50.81         -0.04
 Rupiah                 14110.000   14085         -0.18
 Rupee                  71.718      71.61         -0.15
 Ringgit                4.171       4.172         +0.02
 Yuan                   7.033       7.0348        +0.02
 Change so far in 2019                            
 Currency               Latest bid  End 2018      Pct Move
 Japan yen              109.490     109.56        +0.06
 Sing dlr               1.366       1.3627        -0.24
 Taiwan dlr             30.505      30.733        +0.75
 Korean won             1181.200    1115.70       -5.55
 Baht                   30.220      32.55         +7.71
 Peso                   50.830      52.47         +3.23
 Rupiah                 14110.000   14375         +1.88
 Rupee                  71.718      69.77         -2.72
 Ringgit                4.171       4.1300        -0.98
 Yuan                   7.033       6.8730        -2.28
 (Reporting by Shriya Ramakrishnan in Bengaluru; Editing by
Subhranshu Sahu)
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