October 16, 2019 / 6:06 AM / 4 months ago

EM ASIA FX-Most Asian currencies fall as Hong Kong spat adds to global trade fears

 (Adds commentary, updates prices)
    By Patturaja  Murugaboopathy 
    Oct 16 (Reuters) - Most Asian currencies fell on Wednesday
on fresh worries about China-U.S. ties as political unrest in
Hong Kong became a new flashpoint in strained relations between
the world's two largest economies, knocking appetite for
regional units.
    The U.S. House of Representatives on Tuesday passed new
measures related to pro-democracy protests in Hong Kong, which
would require the U.S. secretary of state to certify every year
the Hong Kong was retaining its autonomy.
    The legislation would damage China's relationship with the
United States if it becomes law, China's foreign ministry said
on Wednesday, adding to the stress of already difficult trade
negotiations between Washington and Beijing.
    "Final passage of the bill would draw the ire of the Chinese
government and probably reduce any chances of a U.S. China trade
deal, even a mini one," said MUFG Bank in a report.
     "This outcome would be negative for financial markets and
have more negative implications for global trade, particularly
Asia-ex Japan."
    Hong Kong has been rocked by massive marches and at times
violent protests involving teargas, petrol bombs and live
rounds, over concerns Beijing is tightening its grip on the city
and eroding democratic rights.
    Beijing rejects the charge and accuses Western countries,
like the United States and Britain, of stirring up trouble.
    Also weighing on sentiment was waning optimism about a
breakthrough in U.S.-China trade negotiations with earlier news
about both sides reaching a first phase of a new deal failing to
yield any concrete details.
    Bloomberg reported that China would struggle to buy $50
billion of U.S. farm goods annually unless it removes
retaliatory tariffs on American products, which would require
reciprocal action by U.S. President Donald Trump.
    China's yuan fell 0.2% on Wednesday after its
central bank set the midpoint at its weakest level since Sept.
12, 38 pips lesser than Reuters' estimate of 7.0708.
    "This USDCNY fix was telling, as it serves to reinforce the
message of potential retaliation should the US Congress
continues to act in support of Hong Kong protesters," Maybank
said in a note.
    The Indian rupee also dropped on worries over its
economy after the International Monetary Fund (IMF) cut its
growth projection to 6.1% from 7% on concerns over corporate and
regulatory uncertainty.
    The U.S.-China trade war will cut 2019 global growth to its
slowest pace since the 2008-2009 financial crisis, the IMF
warned, but said output would rebound if their duelling tariffs
were removed.
    The South Korean won lost 0.24% against the
dollar after its central bank cut its policy interest rate in
efforts to prop up the slowing economy and flagged the
likelihood of further easing.
    The Malaysian ringgit fell on worries that India, the
biggest buyer of Malaysian palm oil so far in 2019, could raise
import taxes or enforce other measures to curb imports from
    India's government was angered after Malaysian Prime
Minister Mahathir Mohamad said last month at the United Nations
that India had "invaded and occupied" Jammu and Kashmir and
asked New Delhi to work with Pakistan to resolve the issue.
    The Philippine peso and Indonesian rupiah
also fell sharply on the day.
    The following table shows rates for Asian currencies against
the dollar at 0533 GMT.
   Change on the day                          
    at   0533 GMT                       
  Currency             Latest  Previou     Pct
                          bid    s day    Move
  Japan yen            108.66   108.84   +0.17
  Sing dlr             1.372    1.3705   -0.08
  Taiwan dlr           30.670   30.686   +0.05
  Korean won           1187.8   1185.2   -0.22
  Baht                 30.400    30.35   -0.16
  Peso                 51.660    51.59   -0.14
  Rupiah               14175.    14160   -0.11
  Rupee                71.500    71.54   +0.06
  Ringgit              4.193     4.189   -0.10
  Yuan                 7.095    7.0819   -0.19
  Change so far in                            
  Currency             Latest  End         Pct
                       bid     2018       Move
  Japan yen            108.66   109.56   +0.83
  Sing dlr             1.372    1.3627   -0.65
  Taiwan dlr           30.670   30.733   +0.21
  Korean won           1187.8  1115.70   -6.07
  Baht                 30.400    32.55   +7.07
  Peso                 51.660    52.47   +1.57
  Rupiah               14175.    14375   +1.41
  Rupee                71.500    69.77   -2.42
  Ringgit              4.193    4.1300   -1.50
  Yuan                 7.095    6.8730   -3.13
 (Reporting By Patturaja  Murugaboopathy)
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