March 29, 2019 / 6:03 AM / 5 months ago

EM ASIA FX-Most Asian currencies up, growth woes bring strong quarter to uncertain end

    * Yuan gains on apparent trade talk progress
    * Rupee continues to see pre-election gains
    * Most units strengthen over quarter, but pare some gains

 (Adds text, updates prices)
    By Nikhil Nainan
    March 29 (Reuters) - Most Asian currencies advanced on
Friday, capping a relatively solid quarter for most of the units
thanks to signs of progress in U.S.-China trade talks and a
dovish tilt by the Federal Reserve.
    The dollar index measured against a basket of its key
rivals was flat at 97.192 on Friday, though it was set for a 1
percent gain this month. 
    That would make it its best performance since October last
year. The resilience of the dollar partly underscored its
safe-haven appeal in the wake of growing economic risks as well
as the move by other central banks to adopt a dovish or easing
bias on policy.   
    "FX may have recovered some losses due to a more sanguine
assessment of the global economy, following a rebound in U.S.
Treasury yields overnight," said Wei Liang, an FX Strategist at
Mizuho Bank. 
    But he cautioned that "Asian currencies are not out of the
woods just yet." 
    India's rupee gained 0.4 percent to 69.075. It has
benefited recently from foreign inflows into equity and bond
markets ahead of a national election starting in April and
higher-yielding bonds relative to peers. 
    The rupee is set to gain 2.3 percent this month, and is up
for a second straight quarter.   
    The mood across markets was also helped after U.S. officials
said China has made proposals in trade talks with the United
States on a range of issues that go further than it has before.

    China's yuan was one of the top gainers on the
day, and is set to add over 2 percent against the dollar this
    The Philippine peso was at 52.62, up 0.3 percent 
against the dollar, while the rupiah was flat. 
    Elsewhere, the Thai baht weakened 0.1 percent as
the latest twist in the country's chaotic election saw the
Election Commission on Thursday declare that a pro-army party
won the popular vote. 
    The announcement does not make clear the overall winner of
Sunday's general election, the first since a 2014 military coup.
    Malaysia's ringgit is poised to weaken this week, as
domestic pressures mount after the country's central bank cut
its 2019 growth forecast on Wednesday.
    Mizhuho's Wei Liang said expectations have risen for Bank
Negara Malaysia to cut rates this year, which is weighing on the
    "Moves in the Asian currencies are getting more nuanced and
there is a lack of a common theme driving the regional
currencies lately, possibly because of a few regional elections
in this half of the year that provided more idiosyncratic
impetus," said Fiona Lim, an FX strategist at Maybank in
    However, the Fed's dovish shift last week resulted in the
U.S. yield curve inverting for the first time since 2007, widely
 interpreted as a signal of a future recession. The broadening
slowdown globally has prompted more central banks to adopt a
dovish policy stance.    
    "Investors are still trying to impute rate cuts across Asia
but Southeast Asian central banks may not relent just yet (BI,
BOT), especially if emerging market nervousness continues to
flare up periodically," OCBC said in a note.
 Change on the day at 0514 GMT                    
 Currency               Latest bid  Previous day  Pct Move
 Japan yen              110.690     110.62        -0.06
 Sing dlr               1.356       1.3562        +0.05
 Taiwan dlr             30.823      30.856        +0.11
 Korean won             1136.100    1136.8        +0.06
 Baht                   31.800      31.76         -0.13
 Peso                   52.550      52.71         +0.30
 Rupiah                 14235.000   14237         +0.01
 Rupee                  69.075      69.34         +0.38
 Ringgit                4.081       4.076         -0.12
 Yuan                   6.725       6.7398        +0.22
 Change so far in 2019                            
 Currency               Latest bid  End 2018      Pct Move
 Japan yen              110.690     109.56        -1.02
 Sing dlr               1.356       1.3627        +0.53
 Taiwan dlr             30.823      30.733        -0.29
 Korean won             1136.100    1115.70       -1.80
 Baht                   31.800      32.55         +2.36
 Peso                   52.550      52.47         -0.15
 Rupiah                 14235.000   14375         +0.98
 Rupee                  69.075      69.77         +1.01
 Ringgit                4.081       4.1300        +1.20
 Yuan                   6.725       6.8730        +2.20
 (Reporting by Nikhil Kurian Nainan in Bengaluru
Editing by Shri Navaratnam)
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