December 4, 2017 / 7:14 AM / 2 months ago

EM ASIA FX-Philippine peso, S.Korean won weaken as dollar firms on tax reform progress

 (Adds text, updates prices)
    By Aaron Saldanha
    Dec 4 (Reuters) - Most Asian currencies weakened on Monday
with the dollar  getting a lift from the U.S. Senate's approval
of a tax overhaul plan at the weekend.    
    The Senate deal moves Republicans and President Donald Trump
a big step closer to their goal of slashing taxes in what would
be the largest change to U.S. taxation since the 1980s. 
    "I expect finally the tax reform will be passed and signed
into law so in January we will see some modest gains in the
dollar versus emerging Asian currencies," said Gao Qi, Asia FX
strategist at Scotiabank. 
    The dollar index, which measures the greenback
against a basket of six major currencies, rose about 0.31
percent to 93.174 at 0644 GMT.
    The Singapore dollar and the Thai baht
weakened 0.19 percent and 0.12 percent, respectively
    The Taiwan dollar traded flat ahead of Tuesday's 
consumer price inflation numbers, expected to be 0.26 percent. 
    Malaysia's ringgit firmed 0.36 percent on Monday, the
most in the region, as November factory data showed the
strongest expansion in the manufacturing sector since April
2014, thanks to solid growth in output and new orders on
improved domestic and overseas demand.
    The yuan firmed 0.08 percent even though the
People's Bank of China (PBOC) set a weaker fixing rate
 for the second consecutive day.
    The currency eased against the greenback on Friday and ended
the week lower.
    The Indian rupee firmed 0.12 percent. The Reserve
Bank of India is due to hold monetary policy committee meeting
on Wednesday.
    Data issued on Friday showed India's foreign exchange
reserves crossed the $400 billion mark on Nov. 24, the highest
since Sept. 22.  

    PHILIPPINE PESO
    The peso continued its decline from Friday and
weakened more than 0.5 percent,the most among its Asian peers,
as the Philippines equity index slipped to its lowest since
mid-September.
    Philippine shares fell more than 1 percent to a near
12-week low as the passage of a tax bill in the U.S. Senate
aided foreign outflows.    
    
    INDONESIAN RUPIAH 
    Indonesia's rupiah traded flat as data for November
showed inflation reached its lowest since December 2016 at 3.30
percent year on year, lower than expectations of 3.40 percent
from a Reuters poll of analysts.
    Core inflation for the same period also came in lower than
expected, at 3.05 percent, against the expected 3.10 percent,
lowering the potential for a rate hike.
    "The key risk going forward is oil price, depending on how
the government will manage administered price changes next
year," DBS Group Research economist Gundy Cahyadi wrote in a
note issued shortly before the data was released. 
    "Otherwise, core inflation staying soft at 3.1 percent
suggests that demand-pull inflationary pressures remain
contained for now."
    S. KOREAN WON
    The Korean won was the region's second-biggest loser
, weakening 0.21 percent against the greenback. 
    "The Korean won appreciated a lot in the past sessions and
it also typically moves at a faster pace compared to regional
currencies. It appreciates more, it depreciates more," added
Scotiabank's Qi. 
    The Bank of Korea hiked the benchmark rate on Nov. 30, as
was widely expected, for the first time in six years.
 
    
    The following table shows rates for Asian currencies against
the dollar at 0649 GMT.
    CURRENCIES VS U.S. DOLLAR: CHANGE AS AT 0649 GMT
   
    Change on the day at 0649 GMT                              
  Currency                            Latest  Previous      Pct
                                         bid       day     Move
  Japan yen                          112.88      112.1    -0.69
  Sing dlr                           1.3491     1.3465    -0.19
  Taiwan dlr                         30.030     30.028    -0.01
  Korean won                         1089       1086.4    -0.21
  Baht                               32.640       32.6    -0.12
  Peso                               50.630      50.37    -0.51
  Rupiah                             13523       13524    +0.01
  Rupee                              64.39       64.46    +0.12
  Ringgit                            4.073      4.0875    +0.36
  Yuan                               6.615      6.6206    +0.08
                                                               
  Change so far in 2017                                        
  Currency                           Latest   End 2016      Pct
                                     bid                   Move
  Japan yen                          112.88     117.07    +3.71
  Sing dlr                           1.3491     1.4490    +7.40
  Taiwan dlr                         30.030     32.279    +7.49
  Korean won                         1089      1207.70   +10.93
  Baht                               32.640      35.80    +9.68
  Peso                               50.630      49.72    -1.80
  Rupiah                             13523       13470    -0.39
  Rupee                              64.385      67.92    +5.49
  Ringgit                            4.073      4.4845   +10.10
  Yuan                               6.615      6.9467    +5.01
 
 (Reporting by Aaron Saldanha in Bengaluru)
  
 
 
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