January 11, 2019 / 5:40 AM / in a month

EM ASIA FX-Most Asian currencies hug tight ranges; yuan leads on trade optimism

 (Adds text, updates prices)
    By Aby Jose Koilparambil
    Jan. 11 (Reuters) - Asian currencies were largely locked in
a tight range on Friday, with most investors adopting a
wait-and-see approach as they tracked developments in U.S.-China
trade talks.
    Both the United States and China have underscored
satisfactory progress in their bid to resolve the months-long
trade dispute that has rattled global financial markets. 
    Investors remain wary as the world's top two economies
continue their talks ahead of the March 1 deadline when the
90-day trade truce between Washington and Beijing ends.
    Financial markets have also had to contend with the shifting
policy stance at the Federal Reserve, mostly in favour of
riskier assets, as policy makers have suggested the central bank
may soon hit the pause button on its tightening cycle. 
    That view was further cemented by Fed Chairman Jerome Powell
reiterating on Thursday the case for being patient on any more
rate increases.
    The Fed's cautious stance has put a break on the dollar, and
in turn helped boost appetite for riskier currencies including
many in Asia. 
    "The sentiment pendulum has swung from U.S. recession fears
to optimism for a dovish Fed and positive U.S.-China trade
talks... The return of risk appetite, in turn, has pressured the
US dollar lower," said analysts at DBS Bank Ltd in a note on
Friday.
    Investors turned bullish on most Asian currencies for the
first time since early last year, a Reuters poll showed, as risk
appetite rose on hopes of a halt to the U.S. rate hike cycle,
and the world's top two economies settling a months-long trade
row. 
    The Chinese yuan strengthened for a third
consecutive session, rising as much as 0.6 percent. 
    The currency of the world's second largest economy is on
course for a weekly gain of about 1.8 percent, its best weekly
performance since July 2005, helped by optimism over trade talks
as well as on a string of measures by Beijing to support a
wobbly economy.
    The Indonesian rupiah, another strong performer in
the new year, is set to put on about 1.8 percent for the week
and was up 0.3 percent on the day.
    The Malaysian ringgit and the Korean won
gained slightly on the day, while the Indian rupee, 
bucked the trend to shed 0.1 percent and is poised to give up
about 1.3 percent for the week.
    "In 2019, the depreciation pressure on the rupee should
moderate relative to 2018, but is unlikely to go away... 
Domestic drivers may also weigh on the INR, including the still
deteriorating core balance of payments, the softening growth
outlook, and election risks," said HSBC Global Research analysts
in a note. 
        
    The following table shows rates for Asian currencies against
the dollar at 0534 GMT.
    CURRENCIES VS U.S. DOLLAR
 
 Currency               Latest bid  Previous day  Pct Move
 Japan yen              108.290     108.42        +0.12
 Sing dlr               1.351       1.3520        +0.10
 Taiwan dlr             30.786      30.782        -0.01
 Korean won             1115.900    1118.3        +0.22
 Baht                   31.880      31.91         +0.09
 Peso                   52.120      52.23         +0.21
 Rupiah                 14015.000   14050         +0.25
 Rupee                  70.420      70.41         -0.01
 Ringgit                4.094       4.095         +0.02
 Yuan                   6.749       6.7890        +0.60
                                                  
 Change so far in 2019                            
 Currency               Latest bid  End 2018      Pct Move
 Japan yen              108.290     109.56        +1.17
 Sing dlr               1.351       1.3627        +0.89
 Taiwan dlr             30.786      30.733        -0.17
 Korean won             1115.900    1115.70       -0.02
 Baht                   31.880      32.55         +2.10
 Peso                   52.120      52.47         +0.67
 Rupiah                 14015.000   14375         +2.57
 Rupee                  70.420      69.77         -0.92
 Ringgit                4.094       4.1300        +0.88
 Yuan                   6.749       6.8730        +1.84
 
 (Reporting by Aby Jose Koilparambil in Bengaluru)
  
 
 
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