September 12, 2018 / 6:54 AM / 7 months ago

EM ASIA FX-Most Asia currencies weaken on renewed trade worries, rupee hits new low

    * Rupee walks back slightly on suspected intervention -
    * S.Korean Aug unemployment rate hits 8-year low 
    * Graphic: EM Asia FX rates in 2018

 (Adds text, updates prices)
    By Nikhil Nainan
    Sept 12 (Reuters) - The Indian rupee sank to yet another
record low on Wednesday,  while most other Asian currencies
traded cautiously in tight ranges against the backdrop of
U.S.-China trade tensions.
    The absence of new controversies in international trade 
since the start of the week had provided investors some hope,
but it faded on Wednesday amid verbal sparring between
Washington and Beijing. 
    China told the World Trade Organisation (WTO) on Tuesday it
wanted $7 billion a year in sanctions on the United States in
retaliation for Washington's non-compliance with a ruling in a
dispute over U.S. dumping duties.
    With U.S. President Donald Trump's threat to impose tariffs
on more Chinese goods not materialising so far this week, risk
sentiment in emerging markets is likely at a stasis point, OCBC
Bank said in a note.
    The dollar index, which measures the greenback
against six major peers, dipped to 95.168.
    Indonesia's rupiah, the region's second
worst-performing currency this year, resumed trade after a
public holiday and weakened 0.2 percent to 14,885 per dollar. 
    Indonesia has been extremely susceptible to emerging market
outflows as fears of contagion from crises in Turkey and
Argentina kept investors risk-averse. 
    The Indonesian 10-year bond yield rose to its
highest since early 2016 at 8.629 percent as bond prices fell.  
    OCBC expects Bank Indonesia, one of the most active central
banks during the emerging market crisis, to hike rates again in
    Trading for the first time this week after public holidays,
Malaysia's ringgit languished around late-2017 lows
against the dollar. It was last at 4.147. 
    The Chinese yuan eased slightly to 6.873 to the
   The rupee reached a new low against the U.S. dollar on
Wednesday, but held off the pivotal 73 level with two traders
spotting mild intervention by the central bank.
    The currency pulled back from intraday lows, and was 0.1
percent weaker at 72.783.
    A slew of data is expected later in the day, including
inflation, which is expected to slip below the Reserve Bank of
India's (RBI) medium-term target in August and would likely
motivate the central bank to keep interest rates on hold, a
Reuters poll showed.
    "This arguably buys the RBI some breathing space. But this
is hollow relief," said Mizuho Bank in a note, amid rising oil
prices and higher food inflation. 
    India's benchmark 10-year bond yield rose even
higher on Wednesday to 8.231 percent, its highest since
mid-November 2014. 
    The won was 0.3 percent weaker at 1,128.1.
    South Korea's unemployment rate hit an eight-year high in
August, adding to economic policy frustrations and political
challenges for President Moon Jae-in.
    "The weakening labour environment is likely a reflection of
the ongoing stagnation of its manufacturing output and weakening
export environment, while job losses were widespread in the
service sectors as industries adjust to the minimum wage
increases," said OCBC Bank. 
 Change on the day at 0520 GMT                          
 Currency                     Latest bid  Previous day  Pct Move
 Japan yen                    111.480     111.62        +0.13
 Sing dlr                     1.377       1.3750        -0.11
 Taiwan dlr                   30.816      30.814        -0.01
 Korean won                   1128.100    1125.3        -0.25
 Baht                         32.810      32.82         +0.03
 Peso                         53.977      53.94         -0.07
 Rupiah                       14885.000   14852         -0.22
 Rupee                        72.783      72.69         -0.13
 Ringgit                      4.147       4.1435        -0.08
 Yuan                         6.873       6.8719        -0.02
 Change so far in 2018                                  
 Currency                     Latest bid  End 2017      Pct Move
 Japan yen                    111.480     112.67        +1.07
 Sing dlr                     1.377       1.3373        -2.85
 Taiwan dlr                   30.816      29.848        -3.14
 Korean won                   1128.100    1070.50       -5.11
 Baht                         32.810      32.58         -0.70
 Peso                         53.977      49.977        -7.41
 Rupiah                       14885.000   13565         -8.87
 Rupee                        72.783      63.87         -12.25
 Ringgit                      4.147       4.0440        -2.48
 Yuan                         6.873       6.5069        -5.33
 (Reporting by Nikhil Kurian Nainan in Bengaluru
Editing by Eric Meijer)
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