(Adds text, updates prices)
By Aby Jose Koilparambil
Nov 14 (Reuters) - Most Asian currencies firmed on Wednesday
as the dollar softened and a slump in oil prices eased concerns
about inflation risks.
Oil prices extended losses after a 7 percent plunge the
previous session as surging supply and the spectre of faltering
demand scared off investors.
The extended slide has offered some respite for big energy
importers in Asia such as India, easing pressure on their fiscal
positions, current account deficits and retail prices.
Most of the South Asian currencies are impacted by movement
in oil price as many of the South Asian and Southeast Asian
economies are net importers of oil.
But further signs of weakness in the global economy could
drag on demand for Asian exports and regional growth in the
longer run.
"From an Asian perspective, where falling oil prices had
been helping Asian FX to firm against the USD, from now on, that
relationship will likely fade away," said Robert Carnell, Chief
Economist and Head of Research, Asia-Pacific at ING.
The dollar slipped on news that Britain has struck a draft
Brexit divorce deal with the European Union after more than a
year of talks, lifting investor sentiment across Asia and
prompting some to move back into riskier assets such as emerging
markets.
The Indian rupee led gainers, firming as much as
0.90 percent to a near eight-week high.
The Indonesian rupiah and the Thai baht
strengthened as much as 0.4 percent each.
Gains were more limited for China's yuan, with
mixed data for October pointing to further weakening in economic
growth despite some signs that increased government spending is
slowly starting to be felt.
The yuan inched up as much as 0.1 percent.
The Philippine peso also climbed, up 0.2 percent
while the Malaysian ringgit edged up, trading 0.1 percent
higher.
Investors are awaiting monetary policy decisions by several
regional central banks this week.
The Bank of Thailand and Bank Indonesia are expected to keep
rates on hold while the odds of another rate hike in the
Philippines are too close to call, according to analysts polled
by Reuters. The BoT decision will be announced later on
Wednesday (0700 GMT) while Indonesia and the Philippines will
release statements on Thursday afternoon.
INDIAN RUPEE
The rupee, the worst regional performer so far this year,
gained for a second straight session.
Besides the fall in oil prices, the Indian rupee was boosted
by the central bank's announcement a day earlier that it would
buy bonds via open market operations.
"The Indian rupee opened sharply higher today against the
dollar after crude oil prices extended losses, improving the
outlook for the country's current account deficit" said Religare
Broking Ltd in a note.
Rupee is expected to be on a strong footing going ahead as
oil prices remain soft and domestic inflation has been falling
sharply.
India's headline annual consumer inflation fell to a
13-month low of 3.31 percent in October, below the central
bank's medium term inflation target of 4 percent, spurring hopes
of interest rates being kept on hold for the next few months.
The following table shows rates for Asian currencies against
the dollar at 0643 GMT.
CURRENCIES VS U.S. DOLLAR
Currency Latest bid Previous day Pct Move
Japan yen 113.870 113.8 -0.06
Sing dlr 1.379 1.3789 -0.03
Taiwan dlr 30.928 30.902 -0.08
Korean won 1134.300 1133.3 -0.09
Baht 32.875 32.995 +0.37
Peso 53.075 53.1 +0.05
Rupiah 14755.000 14805 +0.34
Rupee 72.083 72.67 +0.81
Ringgit 4.190 4.192 +0.05
Yuan 6.948 6.9570 +0.13
Change so far in 2018
Currency Latest bid End 2017 Pct Move
Japan yen 113.870 112.67 -1.05
Sing dlr 1.379 1.3373 -3.05
Taiwan dlr 30.928 29.848 -3.49
Korean won 1134.300 1070.50 -5.62
Baht 32.875 32.58 -0.90
Peso 53.075 49.93 -5.93
Rupiah 14755.000 13565 -8.07
Rupee 72.083 63.87 -11.39
Ringgit 4.190 4.0440 -3.48
Yuan 6.948 6.5069 -6.35
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by
Kim Coghill)
