July 26, 2018 / 6:47 AM / 9 months ago

EM ASIA FX-Most Asian currencies firm on hopes of easing trade conflicts

 (Adds text, updates prices)
    By Chandini Monnappa
    July 26 (Reuters) - Most Asian currencies strengthened on
Thursday, with the dollar weakening after the presidents of the
United States and the European Commission agreed to lower trade
barriers, alleviating immediate concerns about worsening global
trade relations. 
    "Both the EU and U.S. have agreed to put on hold any plans
for tariffs, essentially establishing a trans-Atlantic trade
truce," Mizuho analysts said in a note.
     " This welcome, but unexpected, positive turn in global
trade dynamics almost immediately unravels fears of
trans-Atlantic trade war."
    Investors are also eyeing the European Central Bank's policy
statement due later on Thursday for any references to the pace
of monetary policy normalisation.
    "An announcement of some sort of deal should aid growth, aid
the return of inflation, and aid the ECB and other central
banks' plans to ease monetary accommodation," said Greg McKenna,
chief market strategist at CFD and FX provider AxiTrader.
    Among regional currencies, South Korea's won led
the gains, strengthening 0.5 percent against its U.S. peer while
the Indian rupee strengthened for a second straight
session, gaining as much as 0.13 percent on improving risk
    Taiwan's dollar firmed 0.2 percent 
    Singapore's dollar weakened 0.3 percent while the
Thai Baht traded flat.  

    Chinese Yuan
    The Chinese yuan, which has been under strain
from  the intensifying Sino-U.S. trade row, traded 0.3 percent
    "Any positive developments in the Sino-U.S. trade front
should provide some room for recovery for battered EM Asian FX,"
OCBC analysts said in a note.
    China's central bank (PBOC) lifted its official yuan
midpoint by the most in three weeks to 6.7662 per dollar on
Thursday, reflecting the spot yuan's performance a day earlier
and broad weakness in the greenback overnight.
    Most recently the PBOC has told some Chinese banks that a
prudential capital requirement on them would be eased, Bloomberg
reported, to support lending as authorities try to mitigate 
risks to growth from the nascent Sino-U.S. trade war.

    The following table shows rates for Asian currencies against
the dollar at 0640 GMT.
  Currency                   Latest bid   Previous day  Pct Move
  Japan yen              110.660                110.97     +0.28
  Sing dlr               1.360                  1.3583     -0.15
  Taiwan dlr             30.562                 30.632     +0.23
  Korean won             1119.300               1126.3     +0.63
  Baht                   33.270                  33.27     +0.00
  Peso                   53.417                  53.37     -0.09
  Rupiah                 14450.000               14455     +0.03
  Rupee                  68.703                  68.78     +0.11
  Ringgit                4.058                   4.053     -0.12
  Yuan                   6.783                  6.7638     -0.28
  Change so far in 2018                                         
  Currency               Latest bid      End 2017       Pct Move
  Japan yen              110.660                112.67     +1.82
  Sing dlr               1.360                  1.3373     -1.69
  Taiwan dlr             30.562                 29.848     -2.34
  Korean won             1119.300              1070.50     -4.36
  Baht                   33.270                  32.58     -2.07
  Peso                   53.417                  49.93     -6.53
  Rupiah                 14450.000               13565     -6.12
  Rupee                  68.703                  63.87     -7.03
  Ringgit                4.058                  4.0440     -0.34
  Yuan                   6.783                  6.5069     -4.07

 (Reporting by Chandini Monnappa in Bengaluru; Editing by Eric
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