November 6, 2019 / 9:31 AM / 4 months ago

EM ASIA FX-Thai baht dips after rate cut, others lower

    * Baht touches weakest level since Oct 17
    * ING sees no more Thai rate cuts for the year
    * Philippine peso drops as September trade deficit widens
    * Markets await clarity on China-U.S. tariff concessions
    * Chinese yuan rises on strong midpoint fix

 (Writes through with detail on Thai baht)
    By Ambar Warrick
    Nov 6 (Reuters) - The Thai baht extended losses on Wednesday
after an interest rate cut by the Thai central bank, while most
other Asian currencies dipped as markets awaited concrete
details on China-U.S. tariff concessions. 
    The Bank of Thailand cut rates for a second time this year,
with the benchmark one-day repurchase rate now at a record-low
level as the bank attempts to shore up inflation and rein in a
robust baht. 
    The bank also announced a further relaxation of foreign
exchange rules, in particular allowing exporters to keep more
foreign exchange proceeds abroad.
    The baht fell up to 0.63% after the announcement,
touching its weakest level to the dollar in nearly three weeks. 
   The baht is emerging Asia's best performing currency this
    "Asia’s most hawkish central bank finally conceded to the
fact that the economy needed lower interest rates to stimulate
the domestic spending and also to rein in the rapid pace of baht
appreciation that’s been dampening prospects of any near-term
recovery," ING said in a note.
    ING said the baht was likely to stretch its bull run into
the year-end. 
    A strong baht has weighed on Thai exports and tourism, two
crucial pegs for the economy.
    "With one more policy meeting to go before the year-end, and
given the BoT’s reluctance to ease earlier this year, we expect
no more rate cuts this year," ING said.
    Broader markets tested gains made earlier in the week as
investors digested a report suggesting that the United States
was considering certain tariff concessions on China.
    China is also insisting that the United States remove
tariffs imposed in September as a part of the "phase one" trade
deal, which is expected to be signed this month at a
yet-to-be-determined location.
    The Philippine peso fell 0.32% after data showed its
trade deficit widened in September from the previous month.

    Markets however, expect a rebound in its third-quarter gross
domestic product growth, according to a Reuters poll. The data
is due on Thursday.
    The Indonesian rupiah dipped 0.32%, to hold
slightly below a level of about 14,000 to the dollar.
    Bucking the trend, the Chinese yuan rose about
0.14% after the People's Bank of China set its yuan midpoint at
a three-month high. 
    The currency was also trading below its crucial 7 to a
dollar level, having marked strong gains on the perceived
progress in Sino-U.S. trade negotiations.
    The following table shows rates for Asian currencies against
the dollar on Wednesday.
 Change on the day at   0904 GMT                  
 Currency               Latest bid  Previous day  Pct Move
 Japan yen              108.990     109.15        +0.15
 Sing dlr               1.358       1.3581        +0.01
 Taiwan dlr             30.400      30.371        -0.10
 Korean won             1156.900    1157.5        +0.05
 Baht                   30.280      30.18         -0.33
 Peso                   50.600      50.44         -0.32
 Rupiah                 14010.000   13965         -0.32
 Rupee                  70.923      70.69         -0.33
 Ringgit                4.135       4.129         -0.15
 Yuan                   6.996       7.0058        +0.14
 Change so far in 2019                            
 Currency               Latest bid  End 2018      Pct Move
 Japan yen              108.990     109.56        +0.52
 Sing dlr               1.358       1.3627        +0.35
 Taiwan dlr             30.400      30.733        +1.10
 Korean won             1156.900    1115.70       -3.56
 Baht                   30.280      32.55         +7.50
 Peso                   50.600      52.47         +3.70
 Rupiah                 14010.000   14375         +2.61
 Rupee                  70.923      69.77         -1.63
 Ringgit                4.135       4.1300        -0.12
 Yuan                   6.996       6.8730        -1.76
 (Reporting by Ambar Warrick in Bengaluru
Editing by Simon Cameron-Moore, Robert Birsel)
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