August 24, 2017 / 5:29 AM / 7 months ago

EM ASIA FX-South Korean won, peso lead gains but tone cautious ahead of Jackson Hole

 (Adds text, updates prices)
    By Patturaja  Murugaboopathy 
    Aug 24 (Reuters) - The South Korean won and the
Philippine peso  
led Asian gains against the dollar on Thursday, but traders were
cautious ahead of a gathering of global central bankers in
Jackson Hole, Wyoming.
    Analysts said President Donald Trump's threat on Wednesday
to shut down the U.S. government and possibly pull out of the
North American Free Trade Agreement (NAFTA) also put investors
on edge.
    "Asian currencies are in range trade today. They are
susceptible to external uncertainty such as U.S. political
turmoil, the U.S. debt ceiling and are awaiting the Jackson Hole
symposium," said Qi Gao, Asia FX Strategist at Scotiabank.
    The won's gains were due largely to easing tensions over
North Korea, while the peso was likely correcting after recent
heavy selling, he added.
    However, worries over North Korea will linger, he said.   
Friday marks the one-year anniversary of the North's successful
submarine-launched ballistic missile test. 
    Both the won and peso rose more than a quarter of a percent
    The peso, which had been plumbing 11-year lows, firmed for
the third straight day after the central bank warned traders
that it would intervene in the currency market to curb any
speculative activity on Monday.
    Trump's remarks came ahead of a looming debate in Congress
over raising the debt ceiling.
    "During the last two episodes of a debt ceiling crisis in
July 2011 and October 2013, AXJ currencies strengthened against
the USD as investors sold off US assets, but weakened after the
crisis was averted," said Bank of Tokyo-Mitsubishi UFJ said in a
research note
    "We think that a similar scenario may happen this time,
assuming that a government shutdown is averted and the debt
ceiling is raised." 
    Investors are awaiting speeches from Federal Reserve Chair
Janet Yellen and European Central Bank President Mario Draghi at
the Jackson Hole symposium on Friday. 
    While both Yellen and Draghi are not expected to be deliver
any fresh policy messages in the conference, investors were wary
of any signals that could affect regional currencies.
    THAI BAHT    
    Thai baht was up 0.09 percent against the dollar on
    Leading the regional gains this year, some analysts said the
baht is overvalued given recent signs its export recovery may be
losing momentum.
    Thailand's customs-cleared annual exports rose for a fifth
straight month in July, but fell short of expectations leading
to the country's first trade deficit in more than two years.

     "Thailand’s growth has been disappointing. And inflation is
lowest among the Asian economies. The economy is screaming for
increase in policy accommodation." said Prakash Sakpal, an
economist at ING in Singapore in a note.
    "We expect the Bank of Thailand will be the next Asian
central bank to ease monetary policy after Bank Indonesia and
the Reserve Bank of India."
    The following table shows rates for Asian currencies against
the dollar at 0507 GMT.
   Change on the                                
  day at   0507                         
  Currency            Latest  Previous  Pct Move
                         bid       day  
  Japan yen        109.170      109.02     -0.14
  Sing dlr         1.361        1.3607     +0.01
  Taiwan dlr       30.262       30.290     +0.09
  Korean won       1126.800     1131.8     +0.44
  Baht             33.320        33.35     +0.09
  Peso             51.080        51.22     +0.27
  Rupiah           13349.000     13355     +0.04
  Rupee            64.050        64.11     +0.09
  Ringgit          4.277         4.278     +0.02
  Yuan             6.661        6.6575     -0.05
  Change so far                                 
 in 2017                                
  Currency         Latest     End 2016  Pct Move
  Japan yen        109.170      117.07     +7.24
  Sing dlr         1.361        1.4490     +6.50
  Taiwan dlr       30.262       32.279     +6.67
  Korean won       1126.800    1207.70     +7.18
  Baht             33.320        35.80     +7.44
  Peso             51.080        49.72     -2.66
  Rupiah           13349.000     13470     +0.91
  Rupee            64.050        67.92     +6.04
  Ringgit          4.277        4.4845     +4.85
  Yuan             6.661        6.9467     +4.29
 (Reporting by Patturaja Murugaboopathy in Bengaluru; Editing by
Kim Coghill)
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