November 5, 2019 / 7:09 AM / 15 days ago

EM ASIA FX-Chinese yuan, peso lead gains as trade deal hopes lift mood

    * Yuan hits fresh 2-1/2 month highs
    * Peso up after helpful inflation data
    * Ringgit inch up ahead of cenbank decision
    * 

 (Adds text, updates prices)
    By Aby Jose Koilparambil
    Nov 5 (Reuters) - Asian currencies pulled ahead slightly on
Tuesday as growing signs of progress in Sino-U.S. trade talks
raised hopes of an imminent preliminary deal in a long-running
tariff dispute that has whipsawed financial markets over the
past year.
    However, the gains were checked by a stronger dollar, which
was the chief beneficiary of the brightening prospects on the
trade deal front.
    The dollar index against a basket of six major
currencies rose as much as 0.14% to 97.645, its highest level in
almost a week.
    Any progress in resolving the trade row between the world's
top two economies would potentially boost the dollar and riskier
assets, and also reduce global growth worries and the need for
aggressive monetary easing.
    People familiar with the negotiations told Reuters that
China is pushing U.S. President Donald Trump to remove more
tariffs imposed in September as part of a "phase one" trade
deal.
    The deal, which may be signed later this month by Trump and
Chinese President Xi Jinping at a yet-to-be determined location,
is widely expected to include a U.S. pledge to scrap tariffs
scheduled for Dec. 15 on about $156 billion worth of Chinese
imports, including cell phones, laptop computers and toys.
    "The progress in China-U.S. trade talks has lifted the
sentiment in the currency markets, particularly in the yuan as
there are some talks about U.S. rolling back tariffs on certain
Chinese products," said Gao Qi, forex strategist at Scotiabank.
    Also, underpinning the Chinese yuan were policy
measures initiated to prop up the economy and boost business
confidence, with China's central bank earlier in the day cutting
the interest rate on its medium-term lending facility for the
first time since early 2016.
    The yuan climbed by as much as 0.3% to fresh 2-1/2-month
highs, while the Philippine peso gained about 0.2%.
    The Singapore dollar, the Indian rupee and
the Malaysian ringgit tacked on about 0.1% each.
    Malaysia's central bank kept its benchmark interest rate
unchanged as expected, saving its policy ammunition in case
global growth falters next year.
    The gains in the Thai baht, the Korean won
, the Indonesian rupiah and the Taiwanese
dollar were relatively limited.
    
    PHILIPPINE PESO
    The peso outperformed its South Asian peers on the back of
some positive domestic data as the country's annual inflation
rate slowed for the fifth month in a row in October.

    The consumer price index rose 0.8% in October from a year
earlier, matching the median forecast in a Reuters poll and was
also within the central bank forecast range of 0.5%-1.3% for the
month. 
    CURRENCIES VS U.S. DOLLAR
 Change on the day at   0627 GMT                  
 Currency               Latest bid  Previous day  Pct Move
 Japan yen              108.790     108.56        -0.21
 Sing dlr               1.357       1.3588        +0.13
 Taiwan dlr             30.399      30.405        +0.02
 Korean won             1158.900    1159.2        +0.03
 Baht                   30.190      30.2          +0.03
 Peso                   50.440      50.54         +0.20
 Rupiah                 14000.000   14010         +0.07
 Rupee                  70.725      70.77         +0.06
 Ringgit                4.146       4.149         +0.07
 Yuan                   7.013       7.0305        +0.25
                                                  
 Change so far in 2019                            
 Currency               Latest bid  End 2018      Pct Move
 Japan yen              108.790     109.56        +0.71
 Sing dlr               1.357       1.3627        +0.41
 Taiwan dlr             30.399      30.733        +1.10
 Korean won             1158.900    1115.70       -3.73
 Baht                   30.190      32.55         +7.82
 Peso                   50.440      52.47         +4.02
 Rupiah                 14000.000   14375         +2.68
 Rupee                  70.725      69.77         -1.35
 Ringgit                4.146       4.1300        -0.39
 Yuan                   7.013       6.8730        -2.00
 
 (Reporting by Aby Jose Koilparambil in Bengaluru
Editing by Shri Navaratnam)
  
 
 
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