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EM ASIA FX- Asia FX rises as dollar loses lustre; Philippine pares gains
April 17, 2017 / 5:55 AM / 6 months ago

EM ASIA FX- Asia FX rises as dollar loses lustre; Philippine pares gains

    * U.S. dollar, Treasury yields fall
    * North Korea tensions continue to weigh
    * China Q1 GDP up 6.9 percent

    By Aparajita Saxena
    April 17 (Reuters) - Asian currencies rose on Monday as
falls in the U.S. stock market and Treasury yields kept the U.S.
dollar range-bound, and made regional currencies relatively more
attractive bets.
    Downside to the U.S. dollar and government bond yields came
from President Donald Trump's verbal intervention on Thursday,
when he told the Wall Street Journal the dollar was "getting too
strong" and that he would prefer the Federal Reserve to keep
interest rates low.
    The dollar index, which tracks the U.S. unit against
a basket of six rival currencies, fell 0.17 percent to 100.390
on Monday.
   The 10-year U.S. Treasuries yield fell to 2.200
percent on Thursday, before market holiday on Friday, hitting
their lowest level since mid-November.
    U.S. Treasury benchmark yields also hit near five-month lows
on Thursday, after Trump's comments intensified a bond market
rally, which was also underpinned by worries about potential
U.S. military strikes against North Korea.
    "Asian currencies excluding Japan are caught between two
forces: on the one hand, the U.S. dollar is weighed by the break
of the U.S. 10-year bond yield below its four-month range," said
Philip Wee, senior currency economist, at DBS Bank.
    "On the other hand, Asia ex-Japan currencies are
uncomfortable with the drag from U.S. stocks on their equity
markets."
    Major U.S. stock indexes fell on Thursday, for a third
straight session, after retail sales dropped more than expected
in March, and annual core inflation slowed to 2.0 percent, data
showed.
    The soft U.S. data further dented investor confidence in the
U.S., which was already frayed by worries over North Korea's
failed attempt to launch a missile on Sunday.
    The missile launch added to existing regional unease after
U.S. President Donald Trump took a tough rhetorical line with
Pyongyang, and urged China to do the same.
    "Asian forex markets remain vigilant regarding the
sabre-rattling between the U.S. and North Korea. For now, U.S.
may be looking to first work with allies (especially China) on
non-military options on North Korea," Wee added.
    The Singapore dollar gained 0.18 percent versus the
dollar after export growth beat expectations in March, buoyed by
petrochemical and pharmaceutical shipments, data showed on
Monday.
    The Taiwan dollar rose 0.28 percent to stand at
34.240 against the U.S. dollar, on relief that the U.S. Treasury
did not name it as a currency manipulator. However, Taiwan has
been retained on the U.S. Treasury's monitoring list for trade
practices.
    The Philippine peso, however, fell 0.25 percent
against the dollar, after four straight session of gains, with
inward remittances, foreign inflows into stocks and weak U.S.
data weighing on the currency.
    Strong capital inflows in the past few sessions have kept
the peso buoyant with analysts expecting the prospects of a tax
amnesty plan raising hopes for potential inflows.
    
    CHINESE YUAN
    The yuan was little changed against the U.S.
dollar on the day, barely reacting to data that showed the
Chinese economy grew 6.9 percent in the first quarter from a
year earlier.
    In a highly anticipated report released Friday, U.S.
President Donald Trump's administration declined to name any
major trading partners as currency manipulators, confirming a
decision to back away from his key campaign promise to slap such
a label on China.
    The semi-annual U.S. Treasury currency report, however,
decided to retain China on a currency "monitoring list" despite
Beijing's progress in reducing its global current account
surplus, citing its unusually large trade surplus with the
United States.
    The Treasury report also kept five other trading partners on
the monitoring list: Japan, South Korea, Taiwan, Germany and
Switzerland.
    The yuan did not react to the Treasury report either.
    
    CURRENCIES VS U.S. DOLLAR
  Change at 0524 GMT                                     
  Currency            Latest bid  Previous day   Pct Move
  Japan yen           108.280           108.61      +0.30
  Sing dlr            1.394             1.3972      +0.21
  Taiwan dlr          30.316            30.400      +0.28
  Korean won          1137.200            1140      +0.25
  Baht                34.240            34.486      +0.72
  Peso                49.555             49.43      -0.25
  Rupiah              13257.000          13255      -0.02
  Rupee               64.325             64.41      +0.13
  Ringgit             4.403              4.405      +0.06
  Yuan                6.888             6.8855      -0.04
                                                         
  Change so far                                          
  Currency            Latest bid  End 2016       Pct Move
  Japan yen           108.280           117.07      +8.12
  Sing dlr            1.394             1.4490      +3.92
  Taiwan dlr          30.316            32.279      +6.48
  Korean won          1137.200         1207.70      +6.20
  Baht                34.240             35.80      +4.56
  Peso                49.555             49.72      +0.33
  Rupiah              13257.000          13470      +1.61
  Rupee               64.325             67.92      +5.59
  Ringgit             4.403             4.4845      +1.86
  Yuan                6.888             6.9467      +0.85
 
    

 (Reporting by Aparajita Saxena in Bengaluru; Editing by Sam
Holmes)
  
 
 

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