October 21, 2019 / 6:49 AM / 4 months ago

EM ASIA FX-Won leads regional gains on improved risk appetite

    * Won hits strongest level in more than 3 months
    * Reaction muted to China keeping lending benchmark rate

 (Adds text, updates prices)
    By Aby Jose Koilparambil
    Oct 21 (Reuters) - Asian currencies strengthened on Monday,
with South Korea's won leading gains as hopes of progress on
U.S.-China trade talks lifted appetite for risk assets,
pressuring the dollar.
    The dollar index, measuring the greenback against six
major currencies, was little changed after falling more than a
percent last week in its worst weekly performance in 17 weeks.
    Broader sentiment was also underpinned by positive comments
from China's top trade negotiator, Vice Premier Liu He, on
Friday that the Chinese government will work with Washington to
address each other's concerns, and that stopping the trade war
would be good for both sides and the world.
    The won led gains, putting on as much as 0.7% to
its strongest since July 19.
    "The Asian market is broadly reacting to movements in the
dollar, which has remained weak of late. The Korean won has high
beta to dollar movements and generally does well when the dollar
weakens," said Mitul Kotecha, senior emerging markets strategist
at TD Securities.
    "Some of the key major risks have been sidelined for now
following some progress on the U.S.-China trade negotiations and
that is helping risk assets."
    The Chinese yuan firmed as much as 0.2% after the
country's central bank fixed the daily midpoint at its strongest
in five weeks.
    Separately, China's central bank unexpectedly kept its new
lending benchmark rate unchanged on Monday, suggesting Beijing
is keen to avoid overly loosening monetary policy for fear it
may push up already-high debt levels across the economy.

    However, the reaction to the lending rate decision was
relatively muted in the regional currency market.
    The Indonesian rupiah, the Philippine peso
and the Singapore dollar gained up to 0.2% each.
    The Thai baht and the Malaysian ringgit
tacked on 0.1% each.
    The Taiwan dollar strengthened 0.1% ahead of September
export orders data, due later in the day. 
    Although Taiwan's Ministry of Economic Affairs is expecting
a 6%-8.1% year-on-year decline in exports, there are hopes for a
gradual recovery in the coming months due to the start of the
year-end festive season and rising demand for new technologies
including 5G technology.
    Indian financial markets were closed on Monday for a

 Change on the day at   0607 GMT                  
 Currency               Latest bid  Previous day  Pct Move
 Japan yen              108.470     108.42        -0.05
 Sing dlr               1.362       1.3641        +0.12
 Taiwan dlr             30.577      30.611        +0.11
 Korean won             1174.000    1181.5        +0.64
 Baht                   30.260      30.3          +0.13
 Peso                   51.170      51.24         +0.14
 Rupiah                 14110.000   14139         +0.21
 Ringgit                4.183       4.185         +0.05
 Yuan                   7.074       7.0810        +0.09
 Change so far in 2019                            
 Currency               Latest bid  End 2018      Pct Move
 Japan yen              108.470     109.56        +1.00
 Sing dlr               1.362       1.3627        +0.02
 Taiwan dlr             30.577      30.733        +0.51
 Korean won             1174.000    1115.70       -4.97
 Baht                   30.260      32.55         +7.57
 Peso                   51.170      52.47         +2.54
 Rupiah                 14110.000   14375         +1.88
 Rupee                  71.140      69.77         -1.93
 Ringgit                4.183       4.1300        -1.27
 Yuan                   7.074       6.8730        -2.85

 (Reporting by Aby Jose Koilparambil in Bengaluru;
Editing by Jacqueline Wong)
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