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EM ASIA FX-Asian currencies rise as dollar falls across the broad
March 27, 2017 / 6:54 AM / 8 months ago

EM ASIA FX-Asian currencies rise as dollar falls across the broad

    * Asian currencies rise on broad dollar weakness
    * Taiwan dollar, Thai baht, Indian rupee hit multi-month
    * Search for yield will support EM Asian currencies- analyst

 (Adds detail, updates prices)
    By Patturaja  Murugaboopathy 
    March 27 (Reuters) - Most Asian currencies hit multi-month
highs on Monday as the dollar declined across the board after
U.S. President Donald Trump failed to push through a healthcare
reform bill.
    The collapse of the healthcare legislation has raised doubts
about Trump's ability to deliver on other key campaign pledges
such as tax cuts and massive infrastructure spending.
    However, after his setback, Trump said he would turn his
attention to getting "big tax cuts" through Congress.

    The Taiwan dollar surged to a 30-month high at
30.244 per dollar, while the Thai bhat rose to a
20-month high at 34.429 per dollar.
    The Indian rupee and the South Korean won
 also touched multi-month highs on Monday.
    Emerging Asian currencies were also supported by a fall in 
U.S. Treasury yields. The 10-year U.S Treasury yield stood at
2.3675 percent on Monday, the lowest in nearly a month.  
    "Generally (the healthcare defeat) is a disappointment for
the 'Trump trade'. But in terms of impact on risk sentiment, it
is mixed given the Trump administration now says it will move on
and focus on tax reform, which is relevant to the market," said
Sim Moh Siong, FX strategist at Bank of Singapore.
    He also said the fall in U.S treasury yields would encourage
carry trades in the emerging Asian currencies. 
    "There is still desire to reach for yield, that's keeping
the Asian currencies supportive", Sim said.
    Reuters calculations showed the carry trade in Indian rupee
has yielded more than 5 percent this year.
    However, most of the Asian currencies' gains were linked to
the region's rallying equity markets this year.
    The MSCI's broadest index of Asia-Pacific shares outside
Japan .MIAPJ0000PUS has risen around 12 percent so far in 2017.
Hencem equity inflows into the region would determine the Asian
currencies' movements in the short term, some analysts said.
    "Our sense is that caution creeping in via equity market
impact will act as the initial backstop for USD/AXJ." Mizhuo
Senior Economist Vishnu Varathan said in a note.
  Change on the                                     
 day at   0633                              
  Currency         Latest bid     Previous  Pct Move
  Japan yen      110.160             111.3     +1.03
  Sing dlr       1.394              1.3980     +0.31
  Taiwan dlr     30.246             30.488     +0.80
  Korean won     1112.800           1122.6     +0.88
  Baht           34.439             34.591     +0.44
  Peso           50.140             50.325     +0.37
  Rupiah         13308.000           13326     +0.14
  Rupee          65.080              65.41     +0.50
  Ringgit        4.410               4.423     +0.29
  Yuan           6.873              6.8850     +0.18
  Change so far                                     
  Currency       Latest bid    End 2016     Pct Move
  Japan yen      110.160            117.07     +6.27
  Sing dlr       1.394              1.4490     +3.97
  Taiwan dlr     30.246             32.279     +6.72
  Korean won     1112.800          1207.70     +8.53
  Baht           34.439              35.80     +3.95
  Peso           50.140              49.72     -0.84
  Rupiah         13308.000           13470     +1.22
  Rupee          65.080              67.92     +4.36
  Ringgit        4.410              4.4845     +1.69
  Yuan           6.873              6.9467     +1.08

 (Reporting by Patturaja Murugaboopathy; Editing by Eric Meijer
and Kim Coghill)

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