December 6, 2017 / 6:38 AM / 6 months ago

EM ASIA FX-Most Asian currencies sluggish amid U.S. policy uncertainty

 (Adds text, updates prices)
    Dec 6 (Reuters) - Asian currencies were largely shackled by
an uncertain outlook for the dollar, with trading on Wednesday
reflecting the twin conditions of tax-cut hopes in the United
States and fears of a possible government shutdown.
    A selloff in technology stocks on Wall Street also dampened
the mood, with equities across Asia sliding 1
percent and keeping pressure on some of the regional currencies.
   The dollar was caught in a tug-of-war as expectations of
higher U.S. interest rates clashed with policy uncertainty in
Washington. A flattening U.S. bond yield curve added to the
frustration of greenback bulls.      
    While the Republican-controlled House of Representatives
voted on Monday to go to conference with the Senate to begin
formal negotiations on the tax bill, the possibility of a U.S.
government shutdown loomed large if lawmakers fail to reach a
budget accord this week.
    In Seoul, the losses on Wall Street saw foreign investors
pull out of the equities market, hitting the South Korean won
, which weakened 0.78 percent against the dollar. 
    The benchmark Kospi index  was nearly 1 percent
lower, though it was up 22.7 percent so far this year.
    "Most stock markets in Asia are easing, so the slump in won
could be linked to equity outflows," said Chang Wei Liang, an FX
strategist with Mizuho Bank.
    Wei Liang cautioned that regional currencies could come
under more pressure if the equities continued to lose ground. 
    The Taiwanese dollar, which was also influenced by equity
flows, eased slightly after the country's benchmark equity index
 fell 1.6 percent.
    Moving in the opposite direction, the Malaysian ringgit
 pulled up after the country's export growth in October
beat expectations, breaking a two-month streak of slowing annual
growth as demand for manufactured and mining goods improved.

    The ringgit has been on an uptrend since early November,
helped by a strong economy and rate rise expectations.

    The Indian rupee eased 0.1 percent ahead of a
central bank policy decision.
    The Reserve Bank of India (RBI) is set to keep its rates
unchanged at its meeting on Wednesday, a Reuters poll showed,
with policy makers expected to reiterate their concerns about a
recent uptick in inflation.
    "Policy guidance, divided between a neutral or a hawkish
bias, will be key to watch," DBS Group said in a note.
    "Inflationary risks and firm Q2 FY18 growth numbers provide
the central bank with sufficient justification to sound
    The yuan spot rate was 0.08 percent firmer
against the dollar despite a weaker fix by the central bank,
while volatility in the local currency declined following this
week's launch of a new trading system.
 Change on the day at   0542 GMT                        
 Currency                     Latest bid  Previous day  Pct Move
 Japan yen                    112.13      112.58        +0.40
 Sing dlr                     1.3468      1.3471        +0.02
 Taiwan dlr                   30.001      29.993        -0.03
 Korean won                   1094        1085.8        -0.78
 Baht                         32.570      32.6          +0.09
 Peso                         50.640      50.63         -0.02
 Rupiah                       13525       13518         -0.05
 Rupee                        64.46       64.38         -0.12
 Ringgit                      4.065       4.066         +0.02
 Yuan                         6.614       6.6188        +0.07
 * Closed for market holiday                            
 Change so far in 2017                                  
 Currency                     Latest bid  End 2016      Pct Move
 Japan yen                    112.13      117.07        +4.41
 Sing dlr                     1.3468      1.4490        +7.59
 Taiwan dlr                   30.001      32.279        +7.59
 Korean won                   1094        1207.70       +10.36
 Baht                         32.570      35.80         +9.92
 Peso                         50.640      49.72         -1.82
 Rupiah                       13525       13470         -0.41
 Rupee                        64.455      67.92         +5.38
 Ringgit                      4.065       4.4845        +10.32
 Yuan                         6.614       6.9467        +5.03
 (Reporting by Rushil Dutta in Bengaluru; Editing by Shri
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