November 28, 2018 / 5:35 AM / 4 months ago

EM ASIA FX-Most Asian currencies inch down as caution pervades market

 (Adds text, updates prices)
    By Aby Jose Koilparambil
    Nov 28 (Reuters) - Most Asian currencies weakened slightly
on Wednesday as the dollar firmed after a senior U.S. Federal
Reserve official backed further rate hikes, though the market
remained cautious ahead of the G20 summit at week's end. 
    The dollar trimmed its early gains after touching near
two-week highs when Fed Vice Chair Richard Clarida supported
more hikes, though he said the tightening path would be data
    Clarida's comments "suggest that the Fed has now reached a
point of the hiking cycle where it is close to neutral given the
fact that inflation is close to target," Maybank analysts said
in a note.
    Attention will now turn to a speech by Fed Chairman Jerome
Powell later on Wednesday and minutes from the Fed's Nov. 7-8
meeting, due on Thursday. Investors will be looking for further
clues on how many times the U.S. central bank is likely to hike
rates in 2019.
    The Indonesian rupiah, the Malaysian ringgit
and the Thai baht inched down as much as in the range
of 0.1 percent to 0.2 percent.
    The Indian rupee and the Philippine peso
were fractionally up while the Chinese yuan was
marginally down. 
     Caution remained the dominant factor even as some investors
sought shelter in the greenback, thanks to simmering Sino-U.S.
trade tensions.
    U.S. President Donald Trump on Monday had suggested that his
administration would go ahead with the hike on tariffs on
imported Chinese goods and would even add more items to the
    Trump's tough talk has watered down hopes of a trade truce
between the U.S. and China in the near term, and any further
rise in tensions between the world's largest two economies would
be detrimental for the global economy, particularly emerging
    Market participants naturally hope for a trade truce
following Trump's dinner with Chinese President Xi Jinping,
scheduled on Saturday, after the G20 summit in Argentina.
    "The Chinese yuan is staying weak and is not confident of
any satisfactory trade truce out of the Xi-Trump meeting. At
best, the meeting will delay Trump from hitting tariffs on more
Chinese goods," DBS Bank analysts said in a note.
    "With China still needing to lower its reserve requirement
ratio to cushion its economy, we see the risk for the Chinese
yuan to depreciate past 7 in the coming months," they added.
    Oil prices, a key factor for regional net importers such as
India and Indonesia, rose ahead of an OPEC meeting at which the
producer club is expected to set some form of supply cut to deal
with an emerging glut.
    The following table shows rates for Asian currencies against
the dollar at 0528 GMT.
 Currency                     Latest bid  Previous day  Pct Move
 Japan yen                    113.860     113.77        -0.08
 Sing dlr                     1.377       1.3775        +0.02
 Taiwan dlr                   30.892      30.900        +0.03
 Korean won                   1127.700    1129.4        +0.15
 Baht                         33.030      33            -0.09
 Peso                         52.550      52.605        +0.10
 Rupiah                       14526.000   14510         -0.11
 Rupee                        70.640      70.76         +0.17
 Ringgit                      4.193       4.188         -0.12
 Yuan                         6.954       6.9525        -0.02
 Change so far in 2018                                  
 Currency                     Latest bid  End 2017      Pct Move
 Japan yen                    113.860     112.67        -1.05
 Sing dlr                     1.377       1.3373        -2.90
 Taiwan dlr                   30.892      29.848        -3.38
 Korean won                   1127.700    1070.50       -5.07
 Baht                         33.030      32.58         -1.36
 Peso                         52.550      49.93         -4.99
 Rupiah                       14526.000   13565         -6.62
 Rupee                        70.640      63.87         -9.58
 Ringgit                      4.193       4.0440        -3.55
 Yuan                         6.954       6.5069        -6.43
 (Reporting by Aby Jose Koilparambil in Bengaluru; Editing by
Richard Borsuk)
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