November 14, 2017 / 6:25 AM / a month ago

EM ASIA FX-Most currencies firm as investors shrug off weak China data, yuan flat

 (Adds text, updates prices)
    By Aditya Soni
    Nov 14 (Reuters) - Most Asian currencies firmed slightly on
Tuesday, shrugging off weak China data as the dollar traded
cautiously ahead of inflation data due this week that could set
the tone for  impending U.S. interest rate hikes.
    The dollar index, which tracks the greenback against
six major currencies, was down 0.02 percent despite a rise in
U.S. Treasury yields, usually a source of strength for the
dollar.
    "The key data that market is looking out for is the U.S.
inflation numbers that are due tomorrow. They will be important
not for the December rate hike as from all accounts it is a done
deal but more for the potential path of Fed rate hikes over the
course of 2018," said Khoon Goh, head of Asia research at ANZ.
    A Reuters poll forecast the U.S. consumer price index would
rise 0.1 percent in October after advancing 0.5 percent in
September. 
    A Federal Reserve official said on Monday he expects to back
an interest rate hike next month despite caution over low
inflation because U.S. monetary policy needs to be positioned to
deal with future economic shocks.
    The dollar was also pressured by worries over possible
delays to U.S. President Donald Trump's tax plans as
Congressional Republicans pushed ahead on Monday with their tax
code overhaul, but risks remain with major intraparty disputes
unsettled.
    "If we do get a movement on that (U.S. tax reform) and if it
passes before Christmas it would be supportive of the dollar.
But at this point in time, the markets are taking the view that
perhaps there could be some slippage into the early part of next
year, which is why we are seeing the dollar ease off a bit,"
said Khoon Goh.
    The Korean won led the gains among the regional
currencies as it rose 0.3 percent, while the Philippine peso
 climbed to its highest since Oct. 6, on track for
fifth consecutive session of gains. 
    "We are still seeing equity inflows in Asia and that is
helping to prop up the Asian currencies."
    Foreign investors returned to Asian equities in October,
following three consecutive months of retreat, lured back by the
region's strong economic growth and a rise in corporate
earnings.
    October data from seven Asian exchanges showed foreign
investors bought a net total of about $2.5 billion, the highest
in four months.
    
    
    The Taiwan dollar, Singapore dollar and
Malaysian ringgit also gained ground marginally. 
    The Chinese yuan traded flat after data on Monday
showed the economy cooled further last month, with industrial
output, fixed asset investment and retail sales missing
expectations.
    
    INDIAN RUPEE
    
    The Indian rupee weakened 0.1 percent after retail
inflation rose to a seven-month high in October, driven by food
and fuel inflation.
    India's annual consumer inflation in October
increased to 3.58 percent from a year earlier, government data
showed on Monday.
    "The bigger-than-expected rise in India’s CPI inflation for
October will lead to more bond outflows and undermine the rupee
afterwards. Rising oil prices could widen the nation’s hovering
current account deficit in addition to spurring India’s CPI
inflation," Scotiabank said in a note.
    The central bank of India is scheduled to hold a policy
review on Dec. 6.
    
    The following table shows rates for Asian currencies against
the dollar at 0535 GMT.
    CURRENCIES VS U.S. DOLLAR
    
  Change on the day at                           
        0535 GMT                            
  Currency                Latest  Previous    Pct
                             bid       day   Move
  Japan yen              113.630    113.61  -0.02
  Sing dlr               1.361      1.3616  +0.05
  Taiwan dlr             30.176     30.190  +0.05
  Korean won             1117.80    1120.6  +0.25
                         0                  
  Baht                   33.060      33.06  +0.00
  Peso                   51.120     51.205  +0.17
  Rupiah                 13530.0     13550  +0.15
                         00                 
  Rupee                  65.455      65.42  -0.05
  Ringgit                4.188        4.19  +0.05
  Yuan                   6.640      6.6398  -0.01
                                                 
  Change so far                                  
  Currency               Latest   End 2016    Pct
                         bid                 Move
  Japan yen              113.630    117.07  +3.03
  Sing dlr               1.361      1.4490  +6.47
  Taiwan dlr             30.176     32.279  +6.97
  Korean won             1117.80   1207.70  +8.04
                         0                  
  Baht                   33.060      35.80  +8.29
  Peso                   51.120      49.72  -2.74
  Rupiah                 13530.0     13470  -0.44
                         00                 
  Rupee                  65.455      67.92  +3.77
  Ringgit                4.188      4.4845  +7.08
  Yuan                   6.640      6.9467  +4.62
 
    
    

    
 (Reporting by Aditya Soni in Bengaluru; Editing by Eric Meijer)
  
 
 

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