November 30, 2018 / 5:24 AM / 8 months ago

EM ASIA FX-Most currencies trade in narrow range, rupiah tops gainers

 (Adds text, updates prices)
    By Aby Jose Koilparambil
    Nov 30 (Reuters) - Most Asian currencies traded in a thin
range on Friday as all eyes turn to the G20 summit starting
later in the day during which Chinese and U.S. leaders are
expected to discuss the contentious trade issues between the top
two economies.
    The meeting between U.S. President Donald Trump and his
Chinese counterpart Xi Jinping in Argentina has been the
most-awaited event in recent weeks by markets across assets,
with the outcome potentially becoming a make-or-break one for
investors, particularly in the emerging markets.
    "Though a comprehensive agreement is still unlikely,
agreeing on a framework for future talks, together with a delay
in implementation of a 25 percent tariff hike on $200 billion of
Chinese imports are sufficient to constitute a good outcome,"
said Mizuho Bank analysts in a note.
    The overbearing cautious sentiment notwithstanding, the
softer dollar following U.S. Federal Reserve Chairman Jerome
Powell's midweek speech has lifted some previously beaten-down
emerging market currencies like the Indonesian rupiah and
the Indian rupee.
    The rupiah appreciated the most in the region for a second
consecutive session, gaining as much as 0.8 percent to a near
five-month high.
    The currency is well on track to post a gain of about 1.7
percent for the week, in its fourth uninterrupted run of weekly
gains. The rupiah has gained about 6 percent in November,
largely helped by lower oil prices, which fell about 22 percent
in the period.
    Oil prices firmed on Friday as traders expected OPEC and
Russia to agree on production cuts next week, although swelling
U.S. supplies kept the markets in check.
    The Philippine peso firmed as much as 0.2 percent on
the day and was on course for a 0.1 percent gain for the week to
put on about 2 percent in November.
    The Thai baht too was positioned in the positive
territory, up as much as 0.2 percent and set for weekly and
monthly gains of 0.3 percent and 0.8 percent, respectively.
    The Chinese yuan was little changed despite the
official Purchasing Managers' Index showed stalling growth in
China's vast manufacturing sector for the first time in over two
years in November as new orders shrank.
    Meanwhile, the Korean won led the losers on the
day, down as much as 0.31 percent.
    South Korea's central bank raised its policy interest rate
on Friday for the first time in a year in a widely expected move
aimed mainly at containing a boom in parts of the country's
property market.
    "The (Bank of Korea) statement, considering it is
accompanying a rate-hike decision, does not provide much
justification on the action. Its assessment on the export
outlook may look overly optimistic to some observers," said
Frances Cheung, head of macro at Westpac.
    "We would expect investors to trim short USD positions 
heading into the weekend meetings."
    The Indian rupee gained up to 0.2 percent on the day and was
on track for a solid weekly gain of about 1.3 percent.
    The rupee, the worst performer in the region so far this
year, is set to log in about a 5.8 percent gain for November.
    The currency was helped by the sharp decline in crude oil
prices which eventually would push inflation and current account
deficit lower for India, a net importer of oil.
    Investors now will shift focus to India's GDP data due later
in the day, with the economic growth in Asia's third largest
economy seen slowing in the quarter ending Sept. 30.

    The next week's Reserve Bank of India monetary policy
meeting and the OPEC meeting in Austria, along with the outcome
of the polls in five states to be announced on Dec. 11 too would
be vital trigger events for the rupee. 
    "The Reserve Bank of India (RBI) has sold its FX reserves
sharply in the last couple of months when the rupee was under
huge pressure. Hence, this is a good opportunity for the RBI to
rebuild its reserves. Over the medium term once again the rupee
may move towards 72-73 levels," said analysts at Anand Rathi
Shares and Stock Brokers.
    The following table shows rates for Asian currencies against
the dollar at 0518 GMT.
 Currency                     Latest bid  Previous day  Pct Move
 Japan yen                    113.390     113.47        +0.07
 Sing dlr                     1.371       1.3700        -0.04
 Taiwan dlr                   30.815      30.840        +0.08
 Korean won                   1120.200    1119.2        -0.09
 Baht                         32.890      32.94         +0.15
 Peso                         52.340      52.45         +0.21
 Rupiah                       14300.000   14380         +0.56
 Rupee                        69.680      69.84         +0.23
 Ringgit                      4.183       4.183         +0.00
 Yuan                         6.943       6.9422        -0.01
 Change so far in 2018                                  
 Currency                     Latest bid  End 2017      Pct Move
 Japan yen                    113.390     112.67        -0.63
 Sing dlr                     1.371       1.3373        -2.42
 Taiwan dlr                   30.815      29.848        -3.14
 Korean won                   1120.200    1070.50       -4.44
 Baht                         32.890      32.58         -0.94
 Peso                         52.340      49.93         -4.60
 Rupiah                       14300.000   13565         -5.14
 Rupee                        69.680      63.87         -8.34
 Ringgit                      4.183       4.0440        -3.32
 Yuan                         6.943       6.5069        -6.28
 (Reporting by Aby Jose Koilparambil in Bengaluru; Editing by
Gopakumar Warrier)
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