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EM ASIA FX-Asian currencies push higher as Trump woes weigh on dollar
July 12, 2017 / 6:49 AM / 5 months ago

EM ASIA FX-Asian currencies push higher as Trump woes weigh on dollar

 (Adds details, updates prices)
    By Susan Mathew
    July 12 (Reuters) - Most Asian currencies were higher on
Wednesday against the dollar, which was hit by new suggestions
of Russian influence in the 2016 U.S. presidential election and
amid wider caution ahead of Federal Reserve chair Janet Yellen's
semi-annual congressional address.
    The currencies of South Korea, Taiwan and Thailand all
posted their biggest intraday percentage gains in at least a
month as investors pared their greenback positions, although the
Philippine peso hovered just above a record low it hit on
Tuesday on concerns about the country's trade deficit.   
    Emails from the U.S. president's eldest son, Donald Trump
Jr., showed he agreed to take Russian help to find damaging
evidence against rival candidate Hillary Clinton during the
presidential race last year.
    This comes right before the Yellen's much-awaited address
where she is expected to shed some light on the pace of
tightening after Fed Governor Lael Brainard's comments on
Tuesday disappointed some dollar bulls.

    The dollar index, which tracks the greenback against
six major rivals, was 0.09 percent lower at 95.580 at 0540 GMT.
    "Markets are mulling the fairly subdued FOMC tightening
theme ahead of Yellen's speech and I think that this corresponds
to softer yields also giving rise to some of the pulls that we
see in these currencies," said  Vishnu Varathan, head of
economics and strategy at Mizuho Bank in Singapore.
    "The reallocation out of the dollar... has benefited some of
the low yielding Asian currencies because they are deemed to be
a hedge position."
    Such currencies include the Taiwan dollar, the
South Korean won and to an extent the Singapore
dollar, he says, as they have much lower interest rates
and correspondingly low yields.
    The South Korean won was up as much as 0.6 percent, its
biggest intraday percentage gain in more than 1 month.
    The Taiwan dollar and the Thai baht followed, each rising
0.4 percent. The baht snapped six losing session and hit its
biggest intraday percent gain in a month, while the Taiwan
dollar gained its most in a day since late May 22.
    The Singapore dollar was up 0.1 percent. Data showed that
Singapore retail sales for May rose 0.9 percent from a year
    The Malaysian ringgit was up 0.06 percent, little
moved by domestic industrial production for May,
which rose 4.6 percent from a year earlier.

    The peso bucked the trend for the day, falling
0.14 percent from its previous close after hitting its lowest
since 2006 in its previous session as data showed that
Philippines posted its widest trade deficit in decades in May.

    Joey Cuyegkeng, Senior Economist, Asia at ING said while the
widening trade deficit can be viewed as positive from a domestic
demand perspective, the currency may weaken further in the
near-term owing to a further widening in the deficit. 
    "From a currency stand point, until investors feel that
imports work through the economy and push it to a higher growth
path, then the market focus would be on the near term impact of
a deterioration in balance of trade through a weaker exchange
rate," Cuyegkeng said.
    Investors will now be looking at the next remittance report
he says, for an indication on whether structural inflows can
mitigate the deterioration in the trade balance.
 Change on the day at 0540 GMT                    
 Currency               Latest bid  Previous day  Pct Move
 Japan yen              113.450     113.92        +0.41
 Sing dl                1.380       1.3817        +0.10
 Taiwan dl              30.461      30.593        +0.43
 Korean won             1145.800    1151.1        +0.46
 Baht                   33.990      34.11         +0.35
 Peso                   50.600      50.53         -0.14
 Rupiah                 13365.000   13390         +0.19
 Rupee                  64.520      64.59         +0.10
 Ring                   4.294       4.296         +0.06
 Yuan                   6.788       6.8012        +0.19
 Change so far in 2017                            
 Currency               Latest bid  End 2016      Pct Move
 Japan yen              113.450     117.07        +3.19
 Sing dl                1.380       1.4490        +4.98
 Taiwan dlr             30.461      32.279        +5.97
 Korean won             1145.800    1207.70       +5.40
 Baht                   33.990      35.80         +5.33
 Peso                   50.600      49.72         -1.74
 Rupiah                 13365.000   13470         +0.79
 Rupee                  64.520      67.92         +5.27
 Ringgit                4.294       4.4845        +4.45
 Yuan                   6.788       6.9467        +2.34
 (Reporting by Susan Mathew in Bengaluru; Editing by Sam Holmes)

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