May 8, 2019 / 6:07 AM / 2 months ago

EM ASIA FX-Most Asian currencies weaken as worries on U.S.-China trade talks rise

    * Yuan ends a four-day losing streak
    * Thai baht strengthens ahead of meeting 
    * China April exports contract, while imports rise

 (Adds text, updates prices)
    By Shriya Ramakrishnan
    May 8 (Reuters) - Most emerging Asian currencies weakened on
Wednesday, as fresh  doubts about whether the United States and
China can end their trade war rekindled worries about global
    Beijing said on Tuesday that Chinese Vice Premier Liu He
will travel to Washington for two days of talks starting on
Thursday, setting up a last-ditch bid for a deal that would
avoid a sharp increase in tariffs on Chinese goods ordered by
U.S. President Donald Trump.
    The higher tariffs are scheduled to take effect on Friday,
when Liu would be in Washington.
    The South Korean won on Wednesday weakened as
much as 0.5 percent to 1,172.50 against the dollar. 
    South Korea's finance minister flagged increasing downside
risks for his country, a further sign of weakness for Asia's
fourth largest economy following a sharp contraction in first
quarter growth and sluggish exports.
    Sim Moh Siong, an FX strategist at Bank of Singapore, said
sentiment in Asia is "still one of wariness that if trade
tensions escalate, there could be a further round of weakness in
Asian currencies".  
    "Markets are trying to make out whether we are likely to see
a replay of a tale of two halves or is everything going to
collapse into a situation where it is not quite clear whether
the U.S. dollar will emerge as the winner if the trade war
    The Indian rupee weakened 0.3 percent to its lowest
level in more than a week, while the Indonesian rupiah
declined 0.2 percent. 
    Data released on Wednesday showed China's exports
unexpectedly shrank in April but imports surprised with their
first increase in five months, painting a mixed picture of the
health of the Chinese economy.
    However, the yuan snapped four days of losses to
edge up against the dollar, supported by a rise in corporate
dollar selling after China's central bank set a firmer midpoint.

    The Thai baht, bucking the regional trend,
strengthened 0.4 percent to its best level in three weeks, ahead
of a central bank meeting that is widely expected to keep the
benchmark rate unchanged for a third straight review.

    The Philippine peso edged lower, ahead of Thursday's
release of first quarter growth data and a central bank
    With inflation slowing for a sixth consecutive month in
April, there are growing expectations that Bangko Sentral ng
Pilipinas will ease monetary policy. 
    The Singapore dollar appreciated 0.2 percent against
the dollar on the day.
    "The Singapore dollar is a safe haven currency in Southeast
Asia and so there is definitely some demand due to the
tremendous uncertainties around U.S.-China trade negotiations,"
Margaret Yang Yan, a market analyst at CMC Markets said.
    Singapore's central bank said on Wednesday it would disclose
more information on the actions it takes to implement monetary
policy, including releasing data on foreign exchange
intervention every six months.
    The Monetary Authority of Singapore manages policy through
exchange rate settings rather than interest rates. 
    The following table shows rates for Asian currencies against
the dollar at 0521 GMT.
 Change on the day at   0521 GMT                  
 Currency               Latest bid  Previous day  Pct Move
 Japan yen              109.990     110.24        +0.23
 Sing dlr               1.360       1.3626        +0.16
 Taiwan dlr             30.912      30.911        -0.00
 Korean won             1168.900    1166.5        -0.21
 Baht                   31.770      31.89         +0.38
 Peso                   52.020      52.01         -0.02
 Rupiah                 14308.000   14275         -0.23
 Rupee                  69.605      69.43         -0.26
 Ringgit                4.146       4.147         +0.02
 Yuan                   6.771       6.7780        +0.11
 Change so far in 2019                            
 Currency               Latest bid  End 2018      Pct Move
 Japan yen              109.990     109.56        -0.39
 Sing dlr               1.360       1.3627        +0.17
 Taiwan dlr             30.912      30.733        -0.58
 Korean won             1168.900    1115.70       -4.55
 Baht                   31.770      32.55         +2.46
 Peso                   52.020      52.47         +0.87
 Rupiah                 14308.000   14375         +0.47
 Rupee                  69.605      69.77         +0.24
 Ringgit                4.146       4.1300        -0.39
 Yuan                   6.771       6.8730        +1.51

 (Reporting by Shriya Ramakrishnan in Bengaluru)
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