November 17, 2017 / 6:39 AM / 4 months ago

EM ASIA FX-Most currencies firmer; Indian rupee leads gains after Moody's upgrade

 (Adds text, updates prices)
    By Aditya Soni
    Nov 17 (Reuters) - Most Asian currencies strengthened on
Friday with the U.S. dollar weakened by a media report that
investigators into possible Russian interference in the 2016
U.S. presidential election had subpoenaed President Donald
Trump's election campaign for documents.
    The dollar index was down 0.37 percent to 93.582
after the Wall Street Journal reported that Special Counsel
Robert Mueller's team last month subpoenaed documents containing
specified Russian keywords from more than a dozen
    "I think the Wall Street Journal report has impacted the
dollar move this morning. Overnight, the dollar was somewhat
firm. But ever since this news came out, broad-based weakness
has been observed in it. This has helped the Asian currencies,"
said Sim Moh Siong, FX strategist at Bank of Singapore.   
    The greenback had edged higher overnight, bouncing back from
a more than three-week low in the previous session, after the
U.S. House of Representatives passed a tax reform bill.

    The focus on the tax debate now moves to the Senate, where a
tax-writing panel finished debating and approved a bill late
Thursday evening. That measure has already encountered
resistance from some within the Republicans ranks. 
    The Indian rupee and Japanese yen led the
gains among the regional currencies.
    The Korean won firmed 0.4 percent to its highest
since Sept. 2016, on track for fourth consecutive session of
gains. The currency gained 1.8 percent over the the week, its
highest weekly gain since July 14.
    The Singapore dollar rose marginally after data on
Friday showed that the city-state's exports rose the most in
2-1/2 years in October, well over double market expectations.

    "The Monetary Authority of Singapore (MAS) rarely makes
comments between the two semi-annual monetary policy committee
meetings. But as an export-driven economy, strong exports could
see MAS turning more hawkish in April 2018," said Qi Gao, FX
Strategist (EM Asia) at Scotiabank.
     The Thai baht strengthened 0.3 percent to its
highest since April 2015, while the Philippine peso
and the Indonesian rupiah also climbed and were on
track for weekly gains.  
    The Indian rupee firmed 0.8 percent against the
dollar as Moody's Investors Services upgraded its ratings on the
country's sovereign bonds on Friday.
    Moody's said it was lifting India's rating to Baa2 from Baa3
and changed its rating outlook to stable from positive as risks
to India's credit profile were broadly balanced.
    "The knee-jerk may be for bonds to rally (lower yields), in
particular enjoying some relief from recent bond sell-off
(yields being pushed higher). And in turn, this could feed into
positive debt-fiscal-INR (rupee) dynamics," said Vishnu
Varathan, senior economist at Mizuho Bank.
     The rating agency also said  the recently-introduced goods
and services tax (GST), a landmark reform that turned India's 29
states into a single customs union for the first time, will
boost productivity by removing barriers to interstate trade.
    Investors raised their bullish bets on most Asian currencies
over the past two weeks, with long positions on the Malaysian
ringgit  at their highest since March 2016, a Reuters
poll showed, as the dollar came under pressure after doubts
about the prospects of U.S. tax reform showed no signs of
    Investors have increased their bullish bets on the ringgit
, the South Korean won, and the Thai baht, the poll of 10
respondents showed.
    Long positions on the Singapore dollar rose five-fold as
investors became more optimistic about the pace of economic
growth after factory activity in October expanded the most since
December 2009
    The Malaysian ringgit ticked up 0.4 percent against the
dollar as the economy expanded 6.2 percent annually in the third
quarter, its highest quarterly growth in more than three years.

    The growth in gross domestic prdouct beat a median forecast
of a Reuters poll, supported by by robust private sector
spending and strong exports.
    The following table shows rates for Asian currencies against
the dollar at 0524 GMT.
    Change on the day at 0524 GMT                    
 Currency                 Latest bid   Previous day  Pct Move
 Japan yen             112.520               113.05     +0.47
 Sing dlr              1.355                 1.3562     +0.07
 Taiwan dlr            30.089                30.158     +0.23
 Korean won            1097.400              1101.4     +0.36
 Baht                  32.840                 32.94     +0.30
 Peso                  50.825                  50.9     +0.15
 Rupiah                13518.000              13540     +0.16
 Rupee                 64.818                 65.32     +0.78
 Ringgit               4.160                  4.175     +0.36
 Yuan                  6.629                 6.6283     -0.00
 Change so far                                       
 Currency              Latest bid     End 2016       Pct Move
 Japan yen             112.520               117.07     +4.04
 Sing dlr              1.355                 1.4490     +6.92
 Taiwan dlr            30.089                32.279     +7.28
 Korean won            1097.400             1207.70    +10.05
 Baht                  32.840                 35.80     +9.01
 Peso                  50.825                 49.72     -2.17
 Rupiah                13518.000              13470     -0.36
 Rupee                 64.818                 67.92     +4.79
 Ringgit               4.160                 4.4845     +7.80
 Yuan                  6.629                 6.9467     +4.80

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