September 10, 2019 / 5:33 AM / 6 days ago

EM ASIA FX-Philippine peso slips on trade gap, other currencies tread water

    * China's Aug producer price index drops 0.8%
    * Philippine peso slips on widening trade deficit 
    * Malaysian ringgit leads gains

 (Adds text, updates prices)
    By Shriya Ramakrishnan
    Sept 10 (Reuters) - The Philippine peso weakened on Tuesday
following poor trade figures, while most other emerging Asian
currencies held tight ranges ahead of the European Central Bank
meeting later this week.
    A sharp decline in Chinese factory gate prices also subdued
appetite for riskier assets as investors remained nervous about
the prospects of a global economic slowdown.
    Leading declines in the region, the Philippine peso
traded 0.3% lower, following data that showed the Southeast
Asian nation's trade deficit widened to $3.39 billion in July
from $2.47 billion in the previous month. That has added further
pressure to the Philippine economy, which grew at its slowest in
17 quarters in April-June.
    "As the trade deficit widens, the twin deficit status
(together with fiscal deficit) will add further headwinds on the
currency when risk sentiment turns sour," analysts from Mizuho
Bank said in a client note referring to the peso.  
    Bangko Sentral ng Pilipinas Governor Benjamin Diokno has
flagged a further quarter-point interest rate reduction before
the end of 2019, as it expects prolonged global monetary easing.

    In China, factory-gate prices shrank at the sharpest pace in
three years in August, data showed on Tuesday, falling deeper
into deflationary territory and reinforcing the urgency for
Beijing to step up economic stimulus as the trade war with the
United States intensifies.
    "The data shows the Chinese economy is still trending lower
and there could be more rainy days ahead of us, so the risk
sentiment is now being suppressed," Margaret Yang Yan, a market
analyst at CMC Markets Singapore said. 
    Currency market focus now turns to the ECB meeting, which is
widely expected to introduce a package of stimulus measures and
monetary easing on Thursday to boost an ailing regional economy.

    The U.S. Federal Reserve is also expected to cut interest
rates next week.
    Among regional currencies, the Malaysian ringgit,
which resumed trading after a holiday, advanced 0.2% against the
greenback and was the top gainer in the region. 
    The South Korean won erased earlier gains to
trade 0.1% higher, while China's yuan was marginally
higher. 
    The Taiwan dollar edged higher, after data on
Monday showed the trade-reliant economy's exports rose
unexpectedly in August on strong demand for smartphones.

    Financial markets in India were closed for a holiday.
    
    CURRENCIES VS U.S. DOLLAR
 Change on the day at   0447 GMT                  
 Currency               Latest bid  Previous day  Pct Move
 Japan yen              107.400     107.23        -0.16
 Sing dlr               1.381       1.3793        -0.11
 Taiwan dlr             31.219      31.250        +0.10
 Korean won             1191.300    1193          +0.14
 Baht                   30.650      30.63         -0.07
 Peso                   52.000      51.86         -0.27
 Rupiah                 14025.000   14025         +0.00
 Ringgit                4.170       4.178         +0.19
 Yuan                   7.117       7.1210        +0.06
                                                  
 Change so far in 2019                            
 Currency               Latest bid  End 2018      Pct Move
 Japan yen              107.400     109.56        +2.01
 Sing dlr               1.381       1.3627        -1.31
 Taiwan dlr             31.219      30.733        -1.56
 Korean won             1191.300    1115.70       -6.35
 Baht                   30.650      32.55         +6.20
 Peso                   52.000      52.47         +0.90
 Rupiah                 14025.000   14375         +2.50
 Rupee                  71.700      69.77         -2.69
 Ringgit                4.170       4.1300        -0.96
 Yuan                   7.117       6.8730        -3.43
 

 (Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Sam
Holmes)
  
 
 
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