November 20, 2017 / 5:39 AM / a year ago

EM ASIA FX-Most Asian currencies subdued; Thai baht hits highest in 2-1/2 years

 (Adds text, updates prices)
    By Susan Mathew
    Nov 20 (Reuters) - Most Asian currencies were muted on
Monday in the face of political uncertainty in Germany and
lingering doubts about the prospects for U.S. tax reform,
dimming sentiment.
    The dollar index, which measures the greenback
against a basket of six rivals, was up 0.3 percent as the euro
 slid, hit by German Chancellor Angela Merkel's failure 
to form a three-way coalition government, increasing the level
of political uncertainty.
     Merkel said on Monday she would meet the German president
to inform him that she had failed to form a coalition government
with the Greens and the pro-business Free Democrats (FDP) after
the FDP unexpectedly pulled out of the coalition talks.
    Recently, the dollar has been weighed down by uncertainty
over U.S. tax policy, notably cuts for business and the wealthy.
    Among regional currencies, the Thai baht hit its
highest in more than 2 1/2 years high, while the Malaysian
ringgit was up 0.1 percent at its highest for more than a
    The ringgit continued its gain after data on Friday showed
that Malaysia's economy expanded in the third quarter at its
fastest pace in more than three years, raising expectations of a
interest rate hike at the central bank's next policy meeting in
    "Even though we see a bit of a euro weakness having an
impact on Asian currencies, there is also quite a bit of
positivity within Southeast Asia where we have quite strong
gross domestic product (GDP) growth numbers coming through from
Malaysia and the Philippines that is likely to be quite
supportive of these two currencies - at least in the near term,"
said Wei Liang Chang, FX strategist at Mizuho Bank.
    "So markets are likely to be paying attention to
idiosyncratic factors especially given that you have quite a
good story coming out of Asia."
    Losses in the region were led by an 0.2 percent decline in
the South Korean won, and the Singapore dollar
that slipped 0.2 percent because of the fall in euro.
    The Indian rupee fell 0.15 percent after having led
gains in the region in its previous session after Moody's
Investors Services upgraded its ratings on India's sovereign
bonds on Friday.
    The Taiwan dollar was marginally higher ahead of
balance of payment data due later in the day, while the Chinese
yuan ticked 0.1 percent lower.
    The Thai baht rose to 32.81 per dollar on Monday, its
highest since April 2015, driven by strong third quarter
economic growth data.
    Thailand's economy expanded at its fastest annual rate in 4
1/2 years, although the quarterly pace slowed, indicating
monetary policy will likely remain loose to support
still-sluggish domestic demand.
    "Thailand's third-quarter GDP released this morning was
fairly strong so we see the baht staying fairly stable," Mizuho
Bank's Chang said.
    The baht firmed fractionally after the GDP news, gaining up
to 0.09 percent.
 Change on the day at 0457 GMT                      
 Currency                 Latest bid  Previous day  Pct Move
 Japanese yen             112.00      112.07        +0.06
 Sing dlr                 1.3565      1.3552        -0.10
 Taiwan dlr               30.085      30.101        +0.05
 Korean won               1100        1097.5        -0.24
 Baht                     32.810      32.82         +0.03
 Peso                     50.960      50.95         -0.02
 Rupiah                   13530       13525         -0.04
 Rupee                    65.11       65.01         -0.15
 Ringgit                  4.155       4.16          +0.12
 Yuan                     6.636       6.6285        -0.11
 Change so far in 2017                              
 Currency                 Latest bid  End 2016      Pct Move
 Japanese yen             112.00      117.07        +4.53
 Sing dlr                 1.3565      1.4490        +6.82
 Taiwan dlr               30.085      32.279        +7.29
 Korean won               1100        1207.70       +9.78
 Baht                     32.810      35.80         +9.11
 Peso                     50.960      49.72         -2.43
 Rupiah                   13530       13470         -0.44
 Rupee                    65.108      67.92         +4.32
 Ringgit                  4.155       4.4845        +7.93
 Yuan                     6.636       6.9467        +4.69
 (Reporting by Susan Mathew in Bengaluru; Additional reporting
by Aaron Saldanha; Editing by Eric Meijer)
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