March 12, 2019 / 6:11 AM / 3 months ago

EM ASIA FX-Asian currencies up as Brexit news, China stimulus whet risk appetite

    * Chinese yuan snaps four sessions of losses
    * Korean won top regional performer
    * Philippine peso sole outlier

 (Adds text, updates prices)
    By Aby Jose Koilparambil
    March 12 (Reuters) - Asian currencies firmed on Tuesday,
with the Chinese yuan snapping four days of losses,
thanks to a broad shift towards riskier assets fed in part by
optimism over Sino-U.S. trade talks and on Beijing's planned
stimulus to prop up its slowing economy.
    The overall sentiment in the region was also boosted after
European Commission agreed to changes in a Brexit deal ahead of
a vote in the British parliament on a divorce agreement, driving
gains in the pound. Asian shares too rallied on the Brexit
    Earlier, Chinese state news agency Xinhua reported that the
country's Vice Premier Liu He held a telephone call with U.S.
Treasury Secretary Steven Mnuchin and U.S. Trade Representative
Robert Lighthizer on key issues in their trade talks.

    The Philippine peso was the sole outlier on the day,
losing as much as 0.8 percent, after the country's central bank
chief flagged growth concerns. 
    The dollar index, which measures the greenback
against a basket of rivals, shed 0.2 percent.
    The yuan tacked on as much as 0.3 percent to 6.710 against
the dollar.
    The state-backed Securities Times newspaper quoted a senior
official from the banking regulator as saying on Tuesday that
China may increase its tolerance for non-performing loans at
small companies to help spur their growth.
    Earlier in the week, China's central bank pledged to further
support the slowing economy by boosting loans and lowering
borrowing costs.
    "I think gains in yuan are in line with the big rally in 
risk sentiment that we saw last night, partly coming through
Brexit news," said Wei Liang Chang, forex strategist at Mizuho
    Chang said reduced anxiety around Brexit issue is helping to
draw some inflows into the Asian markets.
    The Korean won was the top performer in the
region, putting on up to 0.6 percent, its best intraday
percentage gain in nearly three weeks.
    The Indian rupee advanced 0.4 percent to 69.61, its
strongest level in more than two months.
    The Indonesian rupiah and the Malaysian ringgit
 tacked on 0.3 percent and 0.2 percent, respectively,
while Thai baht added a relatively small 0.1 percent.
    The peso fell to 52.52 against the dollar, its weakest level
in nearly a month. 
    Sentiment took a knock after Philippine central bank chief
Benjamin Diokno raised the possibility of several cuts this year
in the amount of cash that banks must hold as reserves, given
that there was room to ease monetary policy.
    The governor also said he was concerned that the delayed
approval of the 2019 budget might push this year's economic
growth to the low end of the government's 7-8 percent target.

    Data released on Tuesday showed that Philippines' January
trade deficit widened slightly as exports fell by 1.7 percent
compared to a year ago.

    The Korean won rose as investors cheered gains in  local
equities which were driven up by a rally in Wall Street
technology stocks.
    South Korea's export-oriented economy, which relies mainly
on its technology-related goods, is generally sensitive to any
significant tech movements on Wall Street. 
The following table shows rates for Asian currencies against the
dollar at 0530 GMT.
 Japan yen              111.340     111.19    -0.13
 Sing dlr               1.356       1.3578    +0.15
 Taiwan dlr             30.890      30.910    +0.06
 Korean won             1128.500    1133.7    +0.46
 Baht                   31.680      31.73     +0.16
 Peso                   52.500      52.11     -0.74
 Rupiah                 14250.000   14285     +0.25
 Rupee                  69.620      69.88     +0.37
 Ringgit                4.079       4.087     +0.20
 Yuan                   6.714       6.7279    +0.21
 Change so far in 2019                        
 Currency               Latest bid  End 2018  Pct Move
 Japan yen              111.340     109.56    -1.60
 Sing dlr               1.356       1.3627    +0.51
 Taiwan dlr             30.890      30.733    -0.51
 Korean won             1128.500    1115.70   -1.13
 Baht                   31.680      32.55     +2.75
 Peso                   52.500      52.47     -0.06
 Rupiah                 14250.000   14375     +0.88
 Rupee                  69.620      69.77     +0.22
 Ringgit                4.079       4.1300    +1.25
 Yuan                   6.714       6.8730    +2.38
 (Reporting by Aby Jose Koilparambil in Bengaluru, Additional
reporting by Shriya Ramakrishnan
Editing by Shri Navaratnam)
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