May 22, 2018 / 6:12 AM / a month ago

EM ASIA FX-Most Asian currencies gain as the dollar slips from 5-month highs

    * Indonesia's rupiah gains after days of volatility 
    * Malaysia's ringgit edges up ahead of CPI data
    * Thai baht up on the back of strong economic data 

 (Adds text, updates prices)
    By Nikhil Nainan
    May 22 (Reuters) - Most Asian currencies strengthened on
Tuesday, as the dollar pulled back from the five-month high it
touched the day before, as some investors took profit after
recent gains.
    In the month ended on Monday, the greenback surged 5.4
percent against a basket of major currencies, supported
by rising U.S. bond yields and a defusing of U.S.-China trade
tensions.
    Overnight, the benchmark U.S. 10-year Treasury yields 
stepped back from seven-year highs set last week, but remained
above the 3 percent mark, while the dollar index edged lower.
 
    "A modest decline in U.S. Treasury 10-year yields towards
3.05 percent, on top of the decline in U.S.-China trade
tensions, has contributed to some relief for Asian currencies,"
Mizuho bank said in a note.
    Malaysia's ringgit inched higher ahead of April 
inflation data on Wednesday, a Reuters poll showed the annual
rate is expected to have accelerated slightly from March.

    Stephen Innes, head of trading for Asia-Pacific at Oanda
said in a note the ringgit remains vulnerable to the uncertainty
over the new government's fiscal position given that it is
halting the country's goods and services tax (GST).
    Nonetheless, markets levels "look attractive from both a
bond yield and currency perspective not to mention surging oil
prices... once fiscal clarity is offered, we could finally see
the ringgit sentiment improve,"  he said.
    A day before Singapore's inflation data for April is
released, its currency was slightly lower at 1.341 to
the dollar. A Reuters poll said the annual inflation rate last
month increased from the previous month.
    The Thai baht strengthened 0.2 percent against the
dollar to 32.14. Encouraging economic data has helped shore up
the baht as one the best performing currencies among peers. 
    Data showed customs-cleared exports grew at a faster pace in
April than the previous month, slightly above estimates, while
gross domestic product data out on Monday showed the economy
grew at its fastest in five years in the first quarter.

    Taiwan's dollar climbed 0.2 percent against the
dollar, after data on Monday showed export order growth in April
beat forecasts.
    South Korean markets were closed for a public holiday. On
Wednesday, the central bank has a policy meeting. 
    
    INDONESIAN RUPIAH
    The rupiah marginally strengthened, but it remained
close to more than two-and-a-half year lows. 
    On May 15, Southeast Asia's largest economy reported a trade
deficit for April that was the biggest for any month in four
years, which ING said was main source of concern for the rupiah.

    On May 17, the central bank raised its benchmark rate
 for the first time since 2014 in a bid to shore up
the rupiah.
    "No amount of intervention will change that and rate hikes
will only work if they rise sufficiently far to slow other parts
of the economy and pull trade back into balance," ING said. 
    
    CURRENCIES VS U.S. DOLLAR
 Change on the day at 0500 GMT                          
 Currency                     Latest bid  Previous day  Pct Move
 Japan yen                    110.930     111.04        +0.10
 Sing dlr                     1.341       1.3396        -0.08
 Taiwan dlr                   29.938      29.992        +0.18
 Baht                         32.140      32.21         +0.22
 Peso                         52.267      52.297        +0.06
 Rupiah                       14165.000   14180         +0.11
 Rupee                        68.010      68.12         +0.16
 Ringgit                      3.975       3.978         +0.08
 Yuan                         6.376       6.3809        +0.07
 Change so far in 2018                                  
 Currency                     Latest bid  End 2017      Pct Move
 Japan yen                    110.930     112.67        +1.57
 Sing dlr                     1.341       1.3373        -0.25
 Taiwan dlr                   29.938      29.848        -0.30
 Baht                         32.140      32.58         +1.37
 Peso                         52.267      49.977        -4.38
 Rupiah                       14165.000   13565         -4.24
 Rupee                        68.010      63.87         -6.09
 Ringgit                      3.975       4.0440        +1.74
 Yuan                         6.376       6.5069        +2.05
 

 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by
Richard Borsuk)
  
 
 
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