April 10, 2018 / 4:45 AM / 3 months ago

EM ASIA FX-Most Asian currencies edge up after Xi vows to lower tariffs

    * China's yuan biggest advancer among EM Asia FX
    * Xi's comments calm trade war jitters, sending Asian
currencies
higher 

 (Adds text, updates prices)
    By Christina Martin
    April 10 - Most emerging Asian currencies rose on Tuesday
after President Xi Jinping said he would open China's economy
further and cut import tariffs, easing fears of a U.S.-China
trade war and reviving appetite for riskier assets.
    Speaking at the Boao Forum in Hainan province, Xi said China
will sharply widen market access for foreign investors, a chief
complaint of the country's trading partners and a point of
contention for U.S. President Donald Trump's administration,
which has threatened billions of dollars in tariffs on Chinese
goods.
    The dollar index against a basket of six major currencies
 reacted positively along with U.S. stock futures, Asian
shares, and other financial markets. 
    Markets have been rattled in past weeks by worries that
tit-for-tat U.S.-China tariff proposals could explode into a
full-blown global trade war.
    "The main driver is Xi's speech. He is backing down and
reducing the trade tensions. He said 'lower' auto import
tariffs, which is the opposite of the trend in recent weeks from
both U.S. and China in 'raising' tariffs," said Sean Yokota,
head of Asia strategy at Skandinaviska Enskilda Banken,
Singapore.
    "The reduction in trade tensions is good for global trade,
growth and risk sentiment and helps EM currencies do well. Long
yen positions are getting unwound as risk sentiment improves."
    Among Asian currencies, the Chinese yuan gained
as much as 0.4 percent, its biggest intraday percentage gain in
over a week. 
    The Thai baht rose the most in over one week,
adding as much as 0.2 percent, while the Philippine peso
and the South Korean won edged 0.1 percent higher.
    The Indian rupee and the Malaysian ringgit
also rose up as much as 0.2 percent, while the Singapore dollar
 and the Taiwan dollar posted marginal gains. 
    
    CHINA'S YUAN
    The yuan was the best performer among Asian
currencies.
    It had weakened against the dollar on Monday after a report 
that China is evaluating the potential impact of a gradual yuan
depreciation as a tool in the escalating trade dispute with the
U.S. 
    "Well, the devaluation story goes completely away. We saw
that China was not looking to devalue this morning as well since
the yuan fixing came in line or slightly stronger today," said
Yokota. 
    "China has no intentions to weaken the currency to escalate
trade tensions, and it is gaining. I have a 6.10 forecast on the
yuan for the year-end." 
     In the spot market, the onshore yuan opened at 6.3071 per
dollar and surged to a high of 6.2903 before changing hands at
6.2972 at midday, 154 pips firmer than the previous late session
close.
    
    The following table shows rates for Asian currencies against
the dollar at 0429 GMT.
    CURRENCIES VS U.S. DOLLAR
 Change on the day at   0429 GMT                  
 Currency               Latest bid  Previous day  Pct Move
 Japan yen              107.100     106.75        -0.33
 Sing dlr               1.311       1.3112        +0.05
 Taiwan dlr             29.195      29.209        +0.05
 Korean won             1065.600    1067.1        +0.14
 Baht                   31.230      31.27         +0.13
 Peso                   51.959      52.02         +0.12
 Rupiah                 13753.000   13760         +0.05
 Rupee                  64.900      65.02         +0.18
 Ringgit                3.864       3.869         +0.13
 Yuan                   6.297       6.3126        +0.25
                                                  
 Change so far in 2018                            
 Currency               Latest bid  End 2017      Pct Move
 Japan yen              107.100     112.67        +5.20
 Sing dlr               1.311       1.3373        +2.05
 Taiwan dlr             29.195      29.848        +2.24
 Korean won             1065.600    1070.50       +0.46
 Baht                   31.230      32.58         +4.32
 Peso                   51.959      49.93         -3.91
 Rupiah                 13753.000   13565         -1.37
 Rupee                  64.900      63.87         -1.59
 Ringgit                3.864       4.0440        +4.66
 Yuan                   6.297       6.5069        +3.34
 

 (Reporting By Christina Martin in Bengaluru; Editing by Kim
Coghill)
  
 
 
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