March 28, 2018 / 5:21 AM / a year ago

EM ASIA FX-Emerging Asian currencies tread water on lingering trade worries

 (Adds text, updates prices)
    By Patturaja  Murugaboopathy 
    March 28 (Reuters) - Emerging Asian currencies edged higher
against the dollar on Wednesday, as U.S.-China trade tensions
weighed on the greenback but investor caution about the trade
rift also tempered appetite for risk in the region.
    The South Korean won climbed over 0.25 percent
following the news that the United States and South Korea have
reached agreement on a revised trade pact that includes a side
deal aimed at deterring competitive currency devaluation by
    The dollar index, which measures the greenback versus
a group of six major currencies, was down 0.1 percent at 89.291.
    "The uncertainty over U.S. protectionism isn't going to fade
anytime soon," said Stephen Innes, head of trading in
Asia-Pacific for Oanda in Singapore in a note.
    "While investors should enjoy the small win on the tariff
front, they'll be best served to prepare for a long drawn out
and perhaps more rancorous dialogue between U.S. and China when
it comes to intellectual property rights."
    The Malaysian ringgit, which hit a near 2-year high,
led the regional currencies on the day, bolstered by high oil
prices and portfolio inflows.
    Foreigners have bought $25 million in Malaysian equities
this month to take their year's tally to $590 million, according
to the data compiled by Scotiabank.
    The Taiwan dollar and China's yuan were
trading flat on the day.
    Qi Gao, FX strategist at Scotiabank expects the Taiwan
dollar to rise further as it has been tracking the moves of
China's yuan recently.
    He said China's stance to tolerate more appreciation in the
yuan to help reduce its merchandise trade surplus with the U.S.
would support the Taiwan dollar.
    Some analysts said the fall of 10-year U.S. Treasury yield
to a seven-week low of 2.770 percent would prompt carry trades
in high yielding Asian currencies.
    The Thai baht was down 0.06 percent ahead of the
country's central bank monetary policy meeting.
    A Reuters poll showed the central bank is expected to leave
its policy rate unchanged as the economy gains traction.

    The baht has risen over 4 percent against the dollar this
year, after its 10 percent gain in 2017.
    "A materially stronger effective exchange rate constitutes
tighter overall monetary conditions. And this too offsets the
need for the Bank of Thailand to tighten," Vishnu Varathan, head
of economics and strategy for Mizuho Bank in Singapore, said in
a note.
   Change as of  0438                           
  Currency               Latest  Previous    Pct
                            bid       day   Move
  Japan yen             105.540    105.33  -0.20
  Sing dlr              1.308      1.3096  +0.15
  Taiwan dlr            29.140     29.135  -0.02
  Korean won            1066.00    1070.3  +0.40
  Baht                  31.200      31.18  -0.06
  Peso                  52.230      52.32  +0.17
  Rupiah                13742.0     13740  -0.01
  Rupee                 64.948      64.98  +0.04
  Ringgit               3.857      3.8755  +0.49
  Yuan                  6.278      6.2775  -0.01
  Change so far in                              
  Currency              Latest   End 2017    Pct
                        bid                 Move
  Japan yen             105.540    112.67  +6.76
  Sing dlr              1.308      1.3373  +2.27
  Taiwan dlr            29.140     29.848  +2.43
  Korean won            1066.00   1070.50  +0.42
  Baht                  31.200      32.58  +4.42
  Peso                  52.230      49.93  -4.40
  Rupiah                13742.0     13565  -1.29
  Rupee                 64.948      63.87  -1.66
  Ringgit               3.857      4.0440  +4.86
  Yuan                  6.278      6.5069  +3.64
 (Reporting by Patturaja Murugaboopathy in Bengaluru; Editing by
Sam Holmes)
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