July 4, 2018 / 5:43 AM / a year ago

EM ASIA FX-Most currencies firm, yuan bounces as c.bank soothes markets

    * U.S. dollar slips boosting Asian currencies 
    * Yuan rebounds after China's cenbank calms anxious
    * Thai baht leads gains in the region

 (Adds text, updates prices)
    By Aditya Soni
    July 4 (Reuters) - Most Asian currencies firmed against the
U.S. dollar on Wednesday, recovering some of the previous day's
losses, with the yuan bouncing from 11-month lows after the
Chinese central bank assured it would keep the currency stable.
    The dollar weakened 0.16 percent against a basket of
six major currencies, after posting three consecutive months of
    Meanwhile, the yuan firmed sharply, on track for
its first two-day winning streak since the middle of June.
    The currency rebounded on Tuesday after People's Bank of
China (PBOC) Governor Yi Gang said the central bank was closely
watching fluctuations in the foreign exchange market and would
seek to keep the yuan at a stable and reasonable level.

    "The PBOC engaged the yuan airbrake yesterday afternoon and
at least for the time being, with the help of Chinese
state-owned banks who were seen selling dollars to prop up the
Chinese currency, is restoring a sense of calm in regional
markets," said Stephen Innes, head of trading Asia-Pacific at
OANDA, in a note.
    The yuan has been jittery ahead of a U.S. move later this
week to impose tariffs on $34 billion in Chinese exports to the
United States.
    "Ultimately, unless there's compromise in the trade dispute,
the yuan should remain under pressure," Innes said.
    The Thai baht strengthened 0.3 percent, while the
Indian rupee ticked up 0.1 percent. 
    Export-dependent currencies such as the Taiwan dollar
 and South Korean won firmed 0.3 percent and
0.2 percent, respectively. 
    South Korea's foreign exchange reserves hit a record high in
June, exceeding $400 billion, the central bank said on
    The Singapore dollar also strengthened, rising 0.1
percent, while the Indonesian rupiah climbed 0.2 percent.
    Elsewhere, the Malaysian ringgit slipped ahead of
trade data expected on Thursday.
    A Reuters poll estimates that Malaysia's exports in May are
expected to grow 6.4 percent from a year earlier, slowing
sharply from the previous month. 
    Meanwhile, Malaysia's former Prime Minister Najib Razak
pleaded not guilty to criminal charges on Wednesday after being
arrested at his home on Tuesday as part of the investigations
into allegations of corruption at state fund 1MDB.  
    Innes said "unquestionably, this should not go over well
with offshore investors and will keep the MYR (Malaysian
ringgit) on the defensive." 
    The Philippine peso, which has fallen 6.3 percent so
far this year, was down 0.1 percent as investors braced for
inflation data due on Thursday. 
    Philippine annual inflation likely quickened for a sixth
straight month in June, a Reuters poll showed, leaving the door
open for a third interest rate hike this year.
    The country has been plagued by inflation concerns, a result
of higher oil prices and a weak peso, prompting the central bank
to raise interest rates in May and June.
    The plunge in the peso has sparked persistent foreign
investor selling of Philippine shares which have lost
more than 15 percent this year, the most among Southeast Asian
stock markets.  
    Policymakers forecast inflation to peak in the third quarter
and return inside the central bank's target range in 2019.
    The following table shows rates for Asian currencies against
the dollar.
 Change on the day at 0519 GMT                          
 Currency                     Latest bid  Previous day  Pct Move
 Japan yen                    110.450     110.58        +0.12
 Sing dlr                     1.363       1.3645        +0.14
 Taiwan dlr                   30.535      30.586        +0.17
 Korean won                   1115.600    1118.7        +0.28
 Baht                         33.110      33.2          +0.27
 Peso                         53.353      53.293        -0.11
 Rupiah*                      14350.000   14375         +0.17
 Rupee*                       68.520      68.58         +0.08
 Ringgit                      4.044       4.041         -0.07
 Yuan                         6.628       6.6440        +0.24
 * Closed for market holiday                            
 Change so far in 2018                                  
 Currency                     Latest bid  End 2017      Pct Move
 Japan yen                    110.450     112.67        +2.01
 Sing dlr                     1.363       1.3373        -1.86
 Taiwan dlr                   30.535      29.848        -2.25
 Korean won                   1115.600    1070.50       -4.04
 Baht                         33.110      32.58         -1.60
 Peso                         53.353      49.977        -6.33
 Rupiah                       14350.000   13565         -5.47
 Rupee                        68.520      63.87         -6.79
 Ringgit                      4.044       4.0440        -0.00
 Yuan                         6.628       6.5069        -1.82
 (Reporting by Aditya Soni in Bengaluru
Editing by Jacqueline Wong)
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