August 23, 2018 / 7:05 AM / a month ago

EM ASIA FX-Soften as dollar recovers, speech from Fed's Powell in focus

    * EMFX Asia awaiting fresh cues from Fed Chair's speech
    * China's yuan on track to snap 5 straight gaining sessions 
    * Sing. dlr posts biggest intraday fall in nearly 2 weeks

 (Adds details on yuan, Sing. dlr, analyst comments)
    By Ambar Warrick
    Aug 23 (Reuters) - Asian currencies fell against a resurgent
dollar on Thursday as  investors awaited U.S. Federal Reserve
Chair Jerome Powell's speech on Friday for fresh cues. 
    Markets were looking to a speech by Fed Chairman Jerome
Powell at the Jackson Hole meetings on Friday, amidst widespread
speculation over a possible fourth U.S. rate hike this year.
     A third interest rate hike for the year is widely expected
from the Fed in September.
    The U.S. dollar recovered after falling for six
straight sessions, as the U.S. and China imposed 25 percent
tariffs on about $16 billion worth of each other's goods. 
     U.S. and Chinese officials met on Wednesday to negotiate
their trade ties, but there was little evidence that the
low-level talks would result in immediate action.
    "After the recent pullback in the U.S. dollar over the past
few days we're just seeing some profit-taking and
consolidation(in Asian currencies)," said Khoon Goh, ANZ's head
of Asia research, based in Singapore.
     "The Fed chair's speech (for the central bankers' annual
meeting) at Jackson Hole at the end of the week is a big focus
for markets, and I think right now we're at a bit of a
consolidation phase at this point in time."
     The Chinese yuan fell about 0.5 percent to the
dollar, its biggest intraday drop in a week and breaking five
straight sessions of gains. 
    The currency has lost about 5 percent versus the dollar this
year, primarily on fears arising from the U.S.-China trade
dispute. 
    The United States is holding hearings this week on a
proposed list of an additional $200 billion worth of Chinese
imports to face duties.
    ANZ's Goh said that the tariffs coming into play on Thursday
 are largely priced in, but the planned additional tariffs could
cause further volatility.
    The Indian rupee softened versus the dollar as oil
prices surged overnight after U.S. government data showed a
larger-than-expected draw from crude inventories.
    The rupee is the worst-performing Asian currency this year,
having lost nearly 9 percent to the dollar in the year to date,
reflecting in part India's exposure to oil price volatility. 
    Indonesia's rupiah shed about 0.4 percent due to
high dollar demand from local importers, prompting the central
bank to intervene in the market.
    Bank Indonesia has been struggling to stabilise the falling
rupiah, and has hiked its benchmark interest rate four times
since May. 
    
    SINGAPORE DOLLAR
    The Singapore dollar shed as much as 0.37 percent to
the dollar, its biggest intraday fall in nearly two weeks.
    Singapore's inflation hit its fastest pace in nearly four
years in July, bolstering the central bank's expectation of
inflation coming in at the upper end of its 1-2 percent forecast
range for the year.
    "The Singapore dollar has strengthened to a key technical
level and I think at this point in time there's a reluctance to
push past a key technical level ahead of Powell's speech," ANZ's
Goh added. 
    
    The following table shows rates for Asian currencies against
the dollar as at 0553 GMT.
    CURRENCIES VS U.S. DOLLAR
    
 Change on the day                                      
 Currency                     Latest bid  Previous day  Pct Move
 Japan yen                    110.880     110.54        -0.31
 Sing dlr                     1.371       1.3664        -0.30
 Taiwan dlr                   30.772      30.730        -0.14
 Korean won                   1121.800    1118.9        -0.26
 Baht                         32.800      32.76         -0.12
 Peso                         53.487      53.36         -0.24
 Rupiah                       14633.000   14575         -0.40
 Rupee                        70.090      69.81         -0.40
 Ringgit                      4.103       4.096         -0.17
 Yuan                         6.871       6.8388        -0.47
                                                        
 Change so far in 2018                                  
 Currency                     Latest bid  End 2017      Pct Move
 Japan yen                    110.880     112.67        +1.61
 Sing dlr                     1.371       1.3373        -2.42
 Taiwan dlr                   30.772      29.848        -3.00
 Korean won                   1121.800    1070.50       -4.57
 Baht                         32.800      32.58         -0.67
 Peso                         53.487      49.93         -6.65
 Rupiah                       14633.000   13565         -7.30
 Rupee                        70.090      63.87         -8.87
 Ringgit                      4.103       4.0440        -1.44
 Yuan                         6.871       6.5069        -5.30
 

 (Reporting by Ambar Warrick in Bengaluru
Editing by Eric Meijer)
  
 
 
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