April 26, 2018 / 6:28 AM / a year ago

EM ASIA FX-Most Asian currencies steady as dollar rally pauses ahead of ECB

    * S. Korean won best performer in region
    * ECB meet in focus
    * Malaysian ringgit, Taiwan dollar slip

 (Adds text, updates prices)
    By Chris Thomas
    April 26 - Most emerging Asian currencies were steady
against the dollar on Thursday as the U.S. currency paused from
a rally driven by surging Treasury yields, while focus turned to
the European Central Bank's policy review later in the global
    The dollar's index against a basket of six major currencies
was marginally lower at 91.142 at 0435 GMT, after having
risen to a high of 91.261 on Wednesday.
    The European Central Bank (ECB) is set to keep policy
unchanged on Thursday, playing down worries over recent softness
in the euro zone economy and leaving the door open to ending its
lavish bond purchase scheme by the close of the year.

    "The U.S. dollar is breaking out and if the ECB is even
slightly dovish tonight – or perhaps not hawkish – the euro
could break wide open and with that, the big surge in the USD
will have truly begun," Greg McKenna, chief market strategist at
CFD and FX provider AxiTrader, said in a note.
    The dollar hit multi-month highs against a basket of
currencies recently, bolstered by higher U.S. Treasury yields,
led by the 10-year benchmark breaching the 3 percent threshold
this week for the first time in four years.
    In the region, the Indonesian rupiah struggled to
recover from an over two-year low, edging up 0.1 percent in the
afternoon session.
    Indonesia is prone to capital outflows due to high foreign
ownership of government bonds, and its central bank has tried to
mitigate rupiah risk by buying sovereign bonds and selling
foreign currency. It has also urged businesses to hedge their
foreign exchange needs beyond minimum requirements.

    Traders said Bank Indonesia was seen buying rupiah in the
foreign exchange market, intervening around the 13,930 per
dollar mark.
     McKenna said the dollar appears to be set for another big
rally, which could potentially push the rupiah through 14,000,
and even beyond 14,200. However, "the central bank will
certainly fight that," he said.
    The rest of the regional currencies made small gains, with  
India's rupee up 0.2 percent versus the dollar, the
Singapore dollar 0.1 percent higher and the South Korean
won rising as much as 0.3 percent.
    Singapore's industrial production grew slightly more than
expected in March from a year earlier as electronics output
continued to show strong growth, data showed on Thursday.

    On the losing ledger, Malaysia's ringgit slipped for
a sixth straight session, shedding 0.2 percent to hit a
five-week low.
    The Taiwan dollar also fell 0.2 percent, touching
its weakest level since early Jan.
    The won, which is closely tied to equity flows, recovered
from three sessions of falls after tech giant Samsung
Electronics posted a record quarterly profit and
helped lift the KOSPI stock index more than 1 percent. 
    Earlier in the day, GDP data showed the country's economy
bounced back last quarter, buoyed by booming exports of data
memory chips and a boost from government spending, although
private consumption was sluggish.
    The following table shows rates for Asian currencies against
the dollar at 0531 GMT.
 Currency                     Latest bid  Previous day  Pct Move
 Japan yen                    109.300     109.41        +0.10
 Sing dlr                     1.328       1.3282        +0.05
 Taiwan dlr                   29.692      29.660        -0.11
 Korean won                   1080.000    1080.6        +0.06
 Baht                         31.590      31.58         -0.03
 Peso                         52.247      52.22         -0.05
 Rupiah                       13905.000   13918         +0.09
 Rupee                        66.853      66.90         +0.07
 Ringgit                      3.918       3.91          -0.20
 Yuan                         6.324       6.3270        +0.04
 Change so far in 2018                                  
 Currency                     Latest bid  End 2017      Pct Move
 Japan yen                    109.300     112.67        +3.08
 Sing dlr                     1.328       1.3373        +0.73
 Taiwan dlr                   29.692      29.848        +0.53
 Korean won                   1080.000    1070.50       -0.88
 Baht                         31.590      32.58         +3.13
 Peso                         52.247      49.977        -4.34
 Rupiah                       13905.000   13565         -2.45
 Rupee                        66.853      63.87         -4.46
 Ringgit                      3.918       4.0440        +3.22
 Yuan                         6.324       6.5069        +2.89
 (Reporting by Chris Thomas in Bengaluru; Additional reporting
by Fransiska Nangoy)
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