November 9, 2018 / 6:50 AM / 7 months ago

EM ASIA FX-Asian currencies weaken as Fed stays on hawkish path

    * Indonesia rupiah drops near 1 pct but set for weekly gain
    * Indian rupee bucks trend as markets play catch-up after
holidays
    * Chinese yuan poised to lose 0.9 pct this week

 (Adds detail, updates prices)
    By Niyati Shetty
    Nov 9 (Reuters) - Most Asian currencies weakened against the
dollar on Friday as the greenback gained after the U.S. Federal
Reserve reaffirmed its hawkish monetary policy stance and stayed
on course for a December interest rate hike. 
    Local currencies have seen significant sell-offs this year
as investors gravitated towards higher U.S. bond yields after
the Fed raised key rates three times this year on the back of a
robust U.S. economy.
    Weak-dollar sentiment post-midterms dissipated faster than
expected, with a likely re-focus on central bank decisions as
interest rates between U.S. and other countries continues to
widen, said OCBC in a note to clients.
    The dollar dipped on Wednesday as traders scaled back their
expectations of more pro-business policy moves from U.S.
President Trump after the Democratic Party took control of the
House of Representatives in the mid-term elections.  
    The Indonesian rupiah led losses to weaken nearly 1
percent against the greenback during the session, in its biggest
intraday drop in almost two months. However, the rupiah was on
course to gain 1.9 percent this week. 
    Meanwhile, the Korean won fell 0.9 percent
against the dollar and was on track to lose 0.6 percent this
week.
    Earlier in the day, the South Korean President Moon Jae-in
fired his top economic policymakers and replaced them with
people already in the government in a move widely seen as
intended to reinforce his controversial policies, which
economists have said were hurting growth.
    India's rupee gained 0.4 percent to the dollar as markets
caught up after on-shore trading was closed on Wednesday and
Thursday for public holidays.
    "I think the dollar-rupee will rebound and the rupee will
depreciate," said Gao Qi, analyst at Scotiabank.

    CHINESE YUAN 
    The yuan fell 0.2 percent during the day and
edged closer towards the psychologically important 7 to a dollar
mark. 
    Chinese producer inflation slowed for the fourth straight 
month in October, reflecting cooling domestic demand and ebbing
manufacturing activity amid a bitter trade dispute with the
United States.
    Markets await Trump and Chinese President Xi's meeting at
the G20 summit later in the month, hoping it will ease some of
the tensions between the two countries.
    The yuan was poised to lose 0.9 percent against the
greenback this week.
        
    The following table shows rates for Asian currencies against
the dollar at 0551 GMT.
    CURRENCIES VS U.S. DOLLAR
    
 Currency                     Latest bid  Previous day  Pct Move
 Japan yen                    113.900     114.06        +0.14
 Sing dlr                     1.378       1.3756        -0.14
 Taiwan dlr                   30.763      30.702        -0.20
 Korean won                   1127.800    1117.3        -0.93
 Baht                         33.040      32.885        -0.47
 Peso                         52.930      52.847        -0.16
 Rupiah                       14670.000   14535         -0.92
 Rupee                        72.735      73.00         +0.36
 Ringgit                      4.177       4.162         -0.36
 Yuan                         6.946       6.9340        -0.17
                                                        
 Change so far in 2018                                  
 Currency                     Latest bid  End 2017      Pct Move
 Japan yen                    113.900     112.67        -1.08
 Sing dlr                     1.378       1.3373        -2.92
 Taiwan dlr                   30.763      29.848        -2.97
 Korean won                   1127.800    1070.50       -5.08
 Baht                         33.040      32.58         -1.39
 Peso                         52.930      49.977        -5.58
 Rupiah                       14670.000   13565         -7.53
 Rupee                        72.735      63.87         -12.19
 Ringgit                      4.177       4.0440        -3.18
 Yuan                         6.946       6.5069        -6.32
 

 (Reporting by Niyati Shetty in Bengaluru, editing by Eric
Meijer)
  
 
 
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