May 8, 2018 / 6:22 AM / 14 days ago

EM ASIA FX-Rising bond yields, oil prices hammer Asian currencies

    * Indonesian rupiah hits lowest since Dec 2015 
    * Indian rupee at lowest since Feb last year
    * Malaysian ringgit near four month low ahead of elections 

 (Adds text, updates prices)
    By Susan Mathew
    May 8 (Reuters) - India's rupee and the Indonesian rupiah
fell hard on Tuesday, plumbing depths not seen for more than a
year, as a combination of rising U.S. yields and oil prices hurt
Asia's higher-yielding currencies.
     The Indian rupee fell to 67.2 against the dollar,
its lowest since February last year, while the Indonesian rupiah
 hit 14,403 - its lowest since December 2015. 
    The dollar index firmed 0.1 percent firmer to 92.849
at 0504 GMT as rising Treasury yields and broadly strong U.S.
economic data backed sentiment. 
    U.S. President Donald Trump's impending decision on whether
to withdraw the United States from the Iran nuclear deal, a move
that could disrupt global oil supply, has kept investors braced
for turbulence, said Christopher Wong, a Maybank senior forex
strategist.
     He said if Trump pulled the United States out of the Iran
deal and re-imposed U.S. sanctions, heightened geopolitical
tensions could add upward pressure on oil prices.
    "This could continue to punish the currencies of net
oil-importing countries such as India, Indonesia and
Philippines, which are also suffering from twin (trade and
budget) deficits."
    The Chinese yuan was marginally lower after 
April trade data showed a wider-than-expected trade surplus. Its
trade surplus with the United States also expanded in April,
customs data showed.
    The Taiwan dollar touched its lowest in four months
ahead of data due later in the day expected to show inflation at
1.7 percent in April from 1.6 percent in March.
   
    INDIAN RUPEE
    The rupee was weaker, touching its lowest since February
last year. 
     India's 10-year benchmark bond rallied early on Monday
after the central bank unexpectedly announced last week it would
buy 100 billion rupees ($1.49 billion) of sovereign bonds via
open market operations
    "The Indian authorities extended another helping hand to
rein in bond yields and contain volatility," DBS Group Research
said in a note.
    "The timing comes as a surprise... likely driven by a need
to dampen yields and minimise the impact of foreign debt
outflows." 
   
    INDONESIAN RUPIAH
    Hitting its lowest since Dec 2015, the rupiah extended
losses after disappointing first-quarter economic growth data on
Monday. The number came in below expectations and below the
previous quarter's growth rate.
    "Sluggish growth could limit Bank Indonesia's ability to
lift interest rates to restore financial stability," Mizuho Bank
said in a note.
    Indonesian bond yields also rose on Tuesday as prices fell,
with the benchmark 10-year bond yield at 7.089.
    The central bank has persistently sold dollars to put a
floor under its currency.
    
    MALAYSIAN RINGGIT
    The Malaysian ringgit was near a four-month low on
Tuesday ahead of elections. 
    Malaysia's Prime Minister Najib Razak and his ruling 
Barisan Nasional coalition face their toughest general election
yet on Wednesday with an unprecedented challenge from Mahathir
Mohamad, Najib's former mentor turned opposition leader.

    Mizuho added that downside risks to the currency, from
anything other than improved Barisan Nasional standings, were
significant.
    It noted that a slimmer simple majority could drive a modest
ringgit dip, while an unexpected hung parliament or outright
Barisan Nasional loss could lead to a sharper ringgit selloff
from initial policy and political uncertainty. 
    
    
     CURRENCIES VS U.S. DOLLAR
 Currency                Latest bid  Previous day  Pct Move
 Japan yen               109.070     109.08        +0.01
 Sing dlr                1.337       1.3355        -0.08
 Taiwan dlr              29.800      29.763        -0.12
 Korean won              1078.300    1077.2        -0.10
 Baht                    31.900      31.84         -0.19
 Peso                    51.967      51.929        -0.07
 Rupiah                  14035.000   13995         -0.29
 Rupee                   67.270      67.13         -0.21
 Ringgit                 3.947       3.943         -0.10
 Yuan                    6.366       6.3617        -0.06
                                                   
 Change so far in 2018                             
 Currency                Latest bid  End 2017      Pct Move
 Japan yen               109.070     112.67        +3.30
 Sing dlr                1.337       1.3373        +0.05
 Taiwan dlr              29.800      29.848        +0.16
 Korean won              1078.300    1070.50       -0.72
 Baht                    31.900      32.58         +2.13
 Peso                    51.967      49.977        -3.83
 Rupiah                  14035.000   13565         -3.35
 Rupee                   67.270      63.87         -5.05
 Ringgit                 3.947       4.0440        +2.46
 Yuan                    6.366       6.5069        +2.22
 

($1 = 67.2400 Indian rupees)

 (Reporting by Susan Mathew in Bengaluru;
Editing by Eric Meijer)
  
 
 
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