November 6, 2017 / 7:01 AM / 4 months ago

EM ASIA FX-Asian currencies weaken as dollar rises despite soft U.S. jobs data

 (Adds text, updates prices)
    By Patturaja  Murugaboopathy 
    Nov 6 (Reuters) - Most Asian currencies struggled on Monday
after uninspiring U.S. jobs data issued late last week failed to
dim the prospects of another U.S. Federal Reserve rate hike in
    Friday's employment report showed a slowdown in U.S. wage
growth and a smaller-than-expected increase in nonfarm payrolls
in October, but analysts held to their expectations of a Fed
rate hike at the end of the year.
    The dollar climbed to its highest level in nearly eight
months against the yen after the Bank of Japan said it
will continue with powerful monetary easing under its yield
curve control policy.
    Investors are bullish on the U.S. dollar, said Stephen
Innes, head of trading in Asia-Pacific for Oanda in Singapore,
noting: "There is profit-taking in Asian currencies across the
board now."  
    The declines in Asian currencies were also due to weakness
in region's equity markets. MSCI's broadest index of
Asia-Pacific shares outside Japan slipped 0.7
percent, led by losses in South Korea, Singapore and Taiwan
    "The risk sentiment is wobbling a little bit," said Oanda's
    The South Korean won dropped more than half a
percent against the dollar on the day. South Korea's finance
minister said on Friday that the government was closely watching
currency movements because the won's recent gains against the
dollar seemed excessively fast.
    The won has gained about 2.5 percent over the last month.
    The Indian rupee and Indonesia's rupiah fell
about quarter of a percent each as a rise in crude oil prices
weighed on the two currencies. 
    India and Indonesia are net importers of crude oil, so
higher oil prices are likely to increase their import costs and
affect their currencies.
    Indonesia's slower-than-expected GDP growth in the third
quarter also subdued the rupiah.
    Investors are scrutinising U.S. President Donald Trump's
Asian tour this week, worried that tough talk against North
Korea and on trade relations could affect regional currencies,
analysts said.
    "I look at Asian currencies as two sections: exporters and
the high yielders," said Oanda's Innes.
    High yielding currencies are being pressured by strong
upward momentum in U.S. bonds, while the currencies of major
exporters are wobbling because of risks related to bilateral
relationships with the United States, he said.
    The central banks of Malaysia, Thailand and the Philippines
are due to hold monetary policy meetings this week and most
analysts expect them to stand pat. 
    The Philippine peso was down 0.15 percent against
the dollar, tracking the overall decline in regional currencies.
    However, traders said the weekend's OFW (overseas Filipino
workers') remittances inflows supported the peso on the day.
    Foreign investors have bought a net $25 million in
Philippine equities this month, against net selling in most of
the region's equity markets. 
     With a fall of more than 3 percent against the dollar,    
the peso is the region's weakest performer this year.
    The following table shows rates for Asian currencies against
the dollar at 0604 GMT.
  Change on the day                                   
   at   0604 GMT                        
  Currency            Latest  Previous        Pct Move
                         bid       day  
  Japan yen          114.23     114.06           -0.15
  Sing dlr           1.3639     1.3646           +0.05
  Taiwan dlr         30.199     30.172           -0.09
  Korean won         1116       1113.8           -0.15
  Baht               33.164     33.115           -0.15
  Peso               51.310      51.21           -0.19
  Rupiah             13522       13495           -0.20
  Rupee              64.73       64.55           -0.29
  Ringgit            4.240       4.234           -0.14
  Yuan               6.634      6.6375           +0.05
  Change so far in                                    
  Currency           Latest   End 2016        Pct Move
  Japan yen          114.23     117.07           +2.49
  Sing dlr           1.3639     1.4490           +6.24
  Taiwan dlr         30.199     32.279           +6.89
  Korean won         1116      1207.70           +8.27
  Baht               33.164      35.80           +7.95
  Peso               51.310      49.72           -3.10
  Rupiah             13522       13470           -0.38
  Rupee              64.733      67.92           +4.92
  Ringgit            4.240      4.4845           +5.77
  Yuan               6.634      6.9467           +4.71
 (Reporting by Patturaja Murugaboopathy in Bengaluru; Additional
reporting by Gaurav Dogra in Bengaluru; Editing by Eric Meijer)
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