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Nikhil Nainan

EM ASIA FX-Asian currencies benefit from China data relief

15 Apr 2019

* South Korean won surges as growth worries abate * Rupiah up on surprise trade surplus * Rupee lower ahead of trade data (Adds text, updates prices) By Nikhil Nainan April 15 Most Asian currencies stepped up against the dollar on Monday as investors took comfort in further signs of stabilisation in the Chinese economy and an upbeat start to U.S. earnings. Chinese data on Friday showed exports rebounded sharply and new bank loans increased far more than expected in March, raising hopes that the world's second-biggest economy is bottoming out after a soft patch. "Chinese 'green shoots' appear to be the catalyst for optimism, lifting bond yields and global equities into the end of last week in what appeared to be all-around 'risk on'", Mizuho Bank said in a note. Markets are now turning their focus to the release of China's first-quarter GDP and activity data on Wednesday. Growth in the first quarter is forecast to have cooled to a 27-year low, though many expect major stimulus measures to filter through in the coming quarters. The yuan edged lower to 6.710, a 0.1 percent drop from Friday's close, pressured by some corporate demand for the greenback. South Korea's won outperformed its regional peers, up 0.6 percent to 1,133.2, as slowdown worries ease. The dollar index, a gauge of the performance of the greenback against a basket of key rival currencies weakened 0.1 percent to 96.857. Elsewhere, Indonesia posted a surprise trade surplus for a second straight month in March. The rupiah was 0.2 percent up at 14,060, a level it held for much of the session. The rupiah, which is at a more than one-month high against the dollar, has been among the best performing currencies this year. On Wednesday, Southeast Asia's largest economy goes to the polls. The election in the world's third-biggest democracy is a repeat of the 2014 contest, and the incumbent, president Joko Widodo, has been comfortably ahead in most surveys after winning by almost six percentage points last time around. The Indian rupee, on the other hand, which also reports trade data for March, weakened 0.2 percent to 69.29 a dollar. "INR may be more vulnerable to the 'twin deficits' risks if trade deficit gets too close to or crosses $10 billion," Mizuho Bank said, as oil prices rise. The Philippine traded sideways for much of the session, but was last up 0.1 percent ahead of remittances data later in the day. Markets in Thailand are closed for a public holiday. CURRENCIES VS U.S. DOLLAR Change on the day at 0503 GMT Currency Latest bid Previous day Pct Move Japan yen 111.930 112 +0.06 Sing dlr 1.353 1.3526 +0.00 Taiwan dlr 30.858 30.880 +0.07 Korean won 1133.200 1139.4 +0.55 Peso 51.660 51.69 +0.06 Rupiah 14060.000 14090 +0.21 Rupee 69.290 69.15 -0.20 Ringgit 4.110 4.112 +0.05 Yuan 6.710 6.7048 -0.07 Change so far in 2019 Currency Latest bid End 2018 Pct Move Japan yen 111.930 109.56 -2.12 Sing dlr 1.353 1.3627 +0.75 Taiwan dlr 30.858 30.733 -0.41 Korean won 1133.200 1115.70 -1.54 Peso 51.660 52.47 +1.57 Rupiah 14060.000 14375 +2.24 Rupee 69.290 69.77 +0.69 Ringgit 4.110 4.1300 +0.49 Yuan 6.710 6.8730 +2.44 (Reporting by Nikhil Kurian Nainan in Bengaluru Editing by Shri Navaratnam)

Indian rupee bulls dig in as investors grapple with elections across Asia: Reuters poll

11 Apr 2019

A tale of two elections saw investors raise their bullish bets on the Indian rupee over the past two weeks while long positions on the Thai baht unraveled to their lowest this year, a Reuters poll showed.

EM ASIA FX-Asian currencies firmer as China's factory activity rebounds

01 Apr 2019

* Yuan gains support regional currencies * Thai March inflation at lower end of c.bank target range * Indonesian inflation slows below c.bank target range (Adds text, updates prices) By Nikhil Nainan April 1 Most Asian currencies gained on Monday as a surprise improvement in China's factory activity boosted confidence in regional assets, reversing more pressing concerns about the impact of a broader economic slowdown. Factory activity in China unexpectedly grew for the first time in four months in March, a sign government stimulus may be starting to take hold in the world's second largest economy. "While a single data point is insufficient to declare that the worst is behind us, we should see more signs of stabilisation as Chinese stimuli takes hold," DBS said in a note. The encouraging data supported a 0.1 percent gain in China's yuan to 6.706 a dollar, which in turn supported currencies that tend to track the Chinese unit. The Philippine peso was the top gainer on the day, rising 0.3 percent against the greenback to 52.510. The Singapore dollar and South Korean won strengthened 0.2 percent and 0.3 percent, respectively. As investor confidence returned, the allure of the dollar's safe-haven appeal waned against a basket of its key rivals , falling 0.1 percent. The Thai baht edged higher. Headline consumer prices rose 1.24 percent year-on-year in March, topping forecasts in a Reuters poll but remaining at the lower end of the central bank's 1-4 percent target range. Elsewhere, annual inflation in Indonesia slowed a little more than expected in March, slipping below the central bank's target range for the first time in three years. The rupiah also edged higher, up 0.1 percent to 14,225 per dollar. Currency and bond markets in India were closed for annual account closing of banks. CHINA CHEER If sustained, the improvement in business conditions in China could indicate that manufacturing is on a path to recovery, easing fears that China could slip into a sharper economic downturn. "We expect more signs of activity recovery in the coming months, as fiscal easing kicks in," wrote Julia Wang, a greater China economist at HSBC. "Its recovery also suggests that some export businesses, which have been fearing the worst, are seeing businesses normalising to some degree," she added, but cautioned that the external environment will remain challenging this year. Other analysts also cited the need to quell exuberance and view the upbeat data cautiously. "As any good statistician (and economist) will warn, one data point does not confirm a trend; and so it is too early to be positive, even if optimists get hopeful," Mizuho Bank said in a note. CURRENCIES VS U.S. DOLLAR Change on the day at 0512 GMT Currency Latest bid Previous day Pct Move Japan yen 111.010 110.84 -0.15 Sing dlr 1.353 1.3556 +0.17 Taiwan dlr 30.793 30.825 +0.10 Korean won 1132.300 1135.1 +0.25 Baht 31.700 31.72 +0.06 Peso 52.510 52.67 +0.30 Rupiah 14225.000 14235 +0.07 Ringgit 4.076 4.08 +0.11 Yuan 6.706 6.7124 +0.10 Change so far in 2019 Currency Latest bid End 2018 Pct Move Japan yen 111.010 109.56 -1.31 Sing dlr 1.353 1.3627 +0.69 Taiwan dlr 30.793 30.733 -0.19 Korean won 1132.300 1115.70 -1.47 Baht 31.700 32.55 +2.68 Peso 52.510 52.47 -0.08 Rupiah 14225.000 14375 +1.05 Ringgit 4.076 4.1300 +1.34 Yuan 6.706 6.8730 +2.49 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Sam Holmes)

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

29 Mar 2019

* 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 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 quarter. 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 currency. "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 Singapore. 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. CURRENCIES VS U.S. DOLLAR 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)

EM ASIA FX-Asia currencies mostly weaker on global growth concerns

28 Mar 2019

* Election uncertainty weighs on Thai baht * Malaysian c.bank cuts 2019 growth forecast (Adds text, updates prices) By Nikhil Nainan March 28 Most Asian currencies weakened on Thursday, hurt by a stronger U.S. dollar after more central banks adopted dovish policy stances in response to a deteriorating global economic outlook. The dollar index against a basket of six major currencies strengthened 0.1 percent to 96.878, as its peers went on the defensive. The U.S. yield curve remained inverted, a phenomena that has drubbed global markets in recent days. If it persists, the inversion could indicate that a recession is likely in one to two years. "The dollar has actually held up well, because other central bank have out-doved the Fed," said Khoon Goh, the head of Asia research for ANZ. The Thai baht weakened 0.2 percent as the country faces political uncertainty after a disputed election on Sunday. Unofficial results are expected on Friday. Thailand's central bank said on Thursday it has not ruled out a rate hike this year, but added the economy can meet its growth forecast if political turmoil subsides. In Indonesia, the rupiah was on track for its weakest month since October last year. It was down 0.3 percent on the day. Referring to Indonesia's trade deficit, ANZ's Goh said "there is a tendency to see more dollar demand to the month-end as corporates start to buy dollars for their import bills." Elsewhere, Malaysia's ringgit slipped 0.1 percent to 4.075 a dollar after the central bank cut its economic growth forecast for this year, citing slowing global growth and the U.S.-China trade war. The Philippine peso bucked the overall weak trend, edging higher to 52.7 per dollar. India's rupee weakened 0.2 percent to 69.013 a dollar. The unit has been supported by foreign inflows into equity and bond markets ahead of a national election starting in April and higher-yielding bonds relative to peers. The Reserve Bank of India is scheduled to meet next week and is widely expected to cut rates. "India is a different case where rate cuts tend to benefit the currency unlike other central banks," Goh said, adding a rate cut "should actually provide some support for the rupee because of the FDI inflows into the equity market." CURRENCIES VS U.S. DOLLAR Change on the day at 0451 GMT Currency Latest bid Previous day Pct Move Japan yen 110.180 110.51 +0.30 Sing dlr 1.355 1.3551 +0.02 Taiwan dlr 30.860 30.856 -0.01 Korean won 1137.100 1134.5 -0.23 Baht 31.840 31.78 -0.19 Peso 52.700 52.77 +0.13 Rupiah 14225.000 14190 -0.25 Rupee 69.013 68.87 -0.21 Ringgit 4.075 4.07 -0.12 Yuan 6.731 6.7265 -0.06 Change so far in 2019 Currency Latest bid End 2018 Pct Move Japan yen 110.180 109.56 -0.56 Sing dlr 1.355 1.3627 +0.58 Taiwan dlr 30.860 30.733 -0.41 Korean won 1137.100 1115.70 -1.88 Baht 31.840 32.55 +2.23 Peso 52.700 52.47 -0.44 Rupiah 14225.000 14375 +1.05 Rupee 69.013 69.77 +1.10 Ringgit 4.075 4.1300 +1.35 Yuan 6.731 6.8730 +2.12 (Reporting by Nikhil Kurian Nainan in Bengaluru; editing by Darren Schuettler)

EM ASIA FX-Asian FX weakens as dollar edges up on stable bond yields

27 Mar 2019

* Baht lower as election uncertainty continues * Rupee has gained 2.6 pct so far this month * Peso on track for its worst month since June 2018 (Adds text, updates prices) By Nikhil Nainan March 27 Most emerging Asian currencies weakened on Wednesday with the dollar edging up as U.S. Treasury yields, the subject of much attention and concern, stabilised. The dollar index, a basket of six major currencies versus the greenback, was 0.2 percent higher at 96.899, adding to modest gains overnight. The 10-year U.S. Treasuries yield inched up to as high as 2.432 percent from Monday's 15-month low, though the yield curve remained inverted, keeping investors on edge as this phenomenon has preceded every U.S. recession over the past 50 years. The Thai baht dropped 0.3 percent against the dollar to 31.740, as uncertainty from Sunday's disputed election weighs on investors. In the latest development, the Pheu Thai party, which the military junta overthrew in 2014, said it has formed a "democratic front" with other parties to try and form the government. However, it would likely fall short of electing a prime minister. For many traders, the focus will now partially shift to Thursday's resumption of U.S.-China trade talks in Beijing. Previous talks have raised hopes of a breakthrough as both sides seem intent on reaching a deal. But U.S. President Donald Trump has warned that he may leave tariffs on Chinese goods to ensure a deal is reached. "That Trump has now ruled out the 'carrot approach', (i.e. saying that tariffs will not be rolled back before compliance is verified), means that some degree of uncertainty will remain on the table," Mizuho Bank said in a note on Wednesday. Indonesia's rupiah weakened 0.3 percent to 14,210, and like some of its peers, is on track for a monthly loss following a strong start to the year. The Philippine peso was a shade stronger on Wednesday, but is headed for its worst month since June, likely ending two straight months of gains against the dollar. Declines in U.S. Treasury yields, stemming from the Federal Reserve's dovish shift, "reflect moderating growth expectations in the developed markets," DBS wrote in a note. "Portfolio investors have returned to the regional high-yielding debt markets, including (Indian rupee) bonds." The Indian rupee, which was basically flat on Wednesday, has surged about 2.6 percent against the dollar this month. Indian 10-year benchmark yields, on the decline all month, sharply fell on Tuesday and at 0552 GMT Wednesday were at 7.341 percent. CURRENCIES VS U.S. DOLLAR Change on the day at 0508 GMT Currency Latest bid Previous day Pct Move Japan yen 110.590 110.62 +0.03 Sing dlr 1.354 1.3522 -0.10 Taiwan dlr 30.855 30.835 -0.06 Korean won 1134.600 1133.4 -0.11 Baht 31.740 31.65 -0.28 Peso 52.590 52.62 +0.06 Rupiah 14210.000 14165 -0.32 Rupee 68.880 68.86 -0.03 Ringgit 4.075 4.07 -0.12 Yuan 6.715 6.7150 0.00 Change so far in 2019 Currency Latest bid End 2018 Pct Move Japan yen 110.590 109.56 -0.93 Sing dlr 1.354 1.3627 +0.68 Taiwan dlr 30.855 30.733 -0.40 Korean won 1134.600 1115.70 -1.67 Baht 31.740 32.55 +2.55 Peso 52.590 52.47 -0.23 Rupiah 14210.000 14375 +1.16 Rupee 68.880 69.77 +1.29 Ringgit 4.075 4.1300 +1.35 Yuan 6.715 6.8730 +2.35 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Richard Borsuk)

EM ASIA FX-Asia FX edges up as recession talk abates

26 Mar 2019

* Thai baht slips after poor data * Rupee set for best month of gains since Nov 2018 (Adds text, updates prices) By Nikhil Nainan March 26 Most Asian currencies were in positive territory on Tuesday but sentiment remained fragile as investors reassessed risks to global economic growth, while the baht slipped after poor data. Global markets recoiled on Monday in the wake of an inversion in the U.S. Treasury yield curve, which has signalled a recession in the past. The U.S. dollar rebounded modestly against the yen on Tuesday as Treasury yields pulled back from 15-month lows. While regional currencies saw marginal gains, ING cited several reasons for further optimism. In a note, ING Chief Economist for Asia-Pacific Robert Carnell cited a dollar off its highs for the year, the U.S. Federal Reserve's dovish shift in policy, and the "moderately positive" outlook for talks to end a U.S.-China trade war. South Korea's won was the best performer, up 0.2 percent to 1,132 per dollar. India's rupee strengthened to 68.815 per dollar, on track for its best month of gains since November last year. Mizuho Bank said in a note it expected India's current account deficit for the fourth quarter due this week to decline significantly, reflecting a sharp drop in crude oil prices since late last year. While a decline in the deficit could support the rupee, Mizuho said oil prices have since bounced off their lows and are trending upward, which would limit a sustained deficit reduction. Elsewhere, Indonesia's rupiah and the Philippine peso gained 0.1 percent each. BAHT GIVES UP MARGINAL GAINS AFTER DATA The Thai baht weakened 0.2 percent to 31.63, after factory output data for February unexpectedly dropped 1.6 percent, compared to a Reuters poll forecasting a 0.5 percent rise. The unit, which gained on Monday, was thrown into disarray after two opposition parties alleged cheating in the country's first election since a military coup in 2014. The results remained unclear after the Election Commission said the winners of the remaining 150 lower house seats may be announced only on Friday, while a final announcement is expected on May 9. "Yesterday's inconclusive Thai election results are likely to remain a focus while we await the apportioning of the 150 party seats," ING said. CURRENCIES VS U.S. DOLLAR Change on the day at 0441 GMT Currency Latest bid Previous day Pct Move Japan yen 110.080 109.95 -0.12 Sing dlr 1.349 1.3497 +0.02 Taiwan dlr 30.830 30.830 +0.00 Korean won 1132.000 1134.2 +0.19 Baht 31.630 31.58 -0.16 Peso 52.410 52.46 +0.10 Rupiah 14160.000 14175 +0.11 Rupee 68.815 68.93 +0.17 Ringgit 4.064 4.067 +0.07 Yuan 6.709 6.7090 0.00 Change so far in 2019 Currency Latest bid End 2018 Pct Move Japan yen 110.080 109.56 -0.47 Sing dlr 1.349 1.3627 +0.99 Taiwan dlr 30.830 30.733 -0.31 Korean won 1132.000 1115.70 -1.44 Baht 31.630 32.55 +2.91 Peso 52.410 52.47 +0.11 Rupiah 14160.000 14375 +1.52 Rupee 68.815 69.77 +1.39 Ringgit 4.064 4.1300 +1.62 Yuan 6.709 6.8730 +2.44 (Reporting by Nikhil Kurian Nainan in Bengaluru; editing by Darren Schuettler)

EM ASIA FX-Asia FX weighed by global growth worries; baht gains ahead of poll results

25 Mar 2019

* Thai baht strengthens to 1-month high against dlr * U.S. recession risks to soon to judge (Adds text, updates prices) By Nikhil Nainan March 25 Worries over the health of the global economy weighed on most Asian currencies on Monday, but the Thai baht gained ahead of the results of the country's first election since a 2014 coup. The spread between 3-month U.S. Treasury bills and 10-year note yields inverted on Friday for the first time since 2007. Historically, an inverted yield curve - where long-term rates fall below short-term - has signalled an upcoming recession. The concerns manifested into sharp losses across equity markets in Asia, but analysts were cautious. "The market is probably still somewhat undecided on the prospects for the global economy," said Julian Wee, Investment Strategist at Credit Suisse based in Singapore. "The curve inversion is nascent and might yet prove to be brief, so we would not at this juncture base our projections too heavily on that phenomenon." Indonesia's rupiah and the Indian rupee fell 0.4 percent and 0.2 percent, respectively, with both countries facing key general elections that start next month. South Korea's won was the worst performer of the day, 0.5 percent weaker against the dollar at 1,135.3. Meanwhile, the Singapore dollar traded sideways for much of the morning. Analysts are not expecting headline inflation due later on Monday to result in policy changes by the Monetary Authority of Singapore at its next meeting in April. "Against a weaker global growth outlook, Asia's export-led currencies – the South Korean won and the Singapore dollar – should be trading on the soft side this week," DBS said in a note. While saying recession fears were warranted, DBS guarded against the downside risks, citing the Fed's dovish pivot as a sign that their priority will be to cushion the slowdown risks. THAILAND'S LONG-AWAITED ELECTION The Thai baht strengthened 0.3 percent to 31.58 per U.S. dollar, its highest in nearly one month, after a peaceful general election on Sunday. Partial results showed a pro-army party was ahead of anti-junta parties hoping to make a comeback. Thailand has seen a large exodus of foreign investment in the lead up to the election, which has seen the baht give up some of its strong gains early this year. However, the unit still remains the regions best performer so far in 2019, up over 3 percent. A Thailand-based trader who did not wish to be identified said there was an increase in capital inflows from offshore players on Monday. "With the election ending general drama-free and violence-free, investors who had sat out on election concerns are slowly returning to the market," analysts wrote in a Maybank note. However, Thai stocks dropped about 1 percent, with analysts linking Monday's decline in global equities with the benchmark's losses. CURRENCIES VS U.S. DOLLAR Change on the day at 0451 GMT Currency Latest bid Previous day Pct Move Japan yen 109.950 109.91 -0.04 Sing dlr 1.352 1.3523 +0.04 Taiwan dlr 30.831 30.806 -0.08 Korean won 1135.300 1130.1 -0.46 Baht 31.580 31.68 +0.32 Peso 52.530 52.65 +0.23 Rupiah 14210.000 14160 -0.35 Rupee 69.078 68.95 -0.18 Ringgit 4.068 4.062 -0.15 Yuan 6.714 6.7180 +0.06 Change so far in 2019 Currency Latest bid End 2018 Pct Move Japan yen 109.950 109.56 -0.35 Sing dlr 1.352 1.3627 +0.81 Taiwan dlr 30.831 30.733 -0.32 Korean won 1135.300 1115.70 -1.73 Baht 31.580 32.55 +3.07 Peso 52.530 52.47 -0.11 Rupiah 14210.000 14375 +1.16 Rupee 69.078 69.77 +1.00 Ringgit 4.068 4.1300 +1.52 Yuan 6.714 6.8730 +2.37 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Kim Coghill)

EM ASIA FX-Asia units sink as poor China exports raise global growth worries

08 Mar 2019

* Rupiah at weakest level since Jan 4 * China's yuan hits 2-week low after poor trade data * Peso slips following new c.bank gov's comments (Adds text, updates prices) By Nikhil Nainan March 8 Emerging market currencies across Asia fell on Friday after poor China February trade data added to worries about the state of the global economy already increased by the European Central Bank's dovish signals. The biggest regional loser was the Indonesian rupiah, which dropped to its lowest level since Jan 4. China's yuan slipped 0.1 percent to a two-week low after Beijing reported exports in February tumbled 20.7 percent from a year earlier, far beneath forecasts of a 4.8 percent drop and more than erasing January's surprise jump. The yuan has been among the best performers this year on the heels of progress towards a trade deal between the United States and China. "Hopes for the U.S. and China to seal a trade deal this month are no longer buoying the Chinese yuan and risk appetite," DBS said in a note. The overall mood had already been brittle after the European Central Bank on Thursday slashed its growth forecasts and surprised markets with a new round of policy stimulus, leaving investors fearing the worst for the global economy. The dollar index was 0.1 percent lower at 97.545, while the Japanese yen appreciated 0.3 percent against the dollar. The yen is a perceived safe haven and attracts demand in times of market turmoil and political tensions. The rupiah's fall came as its market reopened after a holiday on Thursday. The unit last stood at 14,300, down 1.2 percent for the day. The Philippine peso weakened 0.2 percent to 52.350 after the newly-appointed central bank chief said there is room to ease monetary policy given cooling inflation, but the timing of any such action depends on how the economy fares. Governor Benjamin Diokno, who is largely seen by the market as pro-growth, will chair his first policy meeting on March 21. A Thai court's Thursday order dissolving an opposition party for nominating the king's sister as its candidate for prime minister in the coming election did not move the baht. The unit, largely flat for much of the morning, slipped 0.1 percent to 31.82 to the dollar. "The Thai baht has depreciated a lot recently on uncertainty surrounding the upcoming general election set for 24 March," said Gao Qi, a FX Strategist at Scotiabank. CURRENCIES VS U.S. DOLLAR Change on the day at 0451 GMT Currency Latest bid Previous day Pct Move Japan yen 111.250 111.58 +0.30 Sing dlr 1.360 1.3606 +0.06 Taiwan dlr 30.895 30.869 -0.08 Korean won 1134.200 1129 -0.46 Baht 31.820 31.79 -0.09 Peso 52.350 52.25 -0.19 Rupiah 14300.000 14135 -1.15 Rupee 70.195 70.00 -0.28 Ringgit 4.090 4.086 -0.10 Yuan 6.721 6.7133 -0.11 Change so far in 2019 Currency Latest bid End 2018 Pct Move Japan yen 111.250 109.56 -1.52 Sing dlr 1.360 1.3627 +0.21 Taiwan dlr 30.895 30.733 -0.52 Korean won 1134.200 1115.70 -1.63 Baht 31.820 32.55 +2.29 Peso 52.350 52.47 +0.23 Rupiah 14300.000 14375 +0.52 Rupee 70.195 69.77 -0.61 Ringgit 4.090 4.1300 +0.98 Yuan 6.721 6.8730 +2.26 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Richard Borsuk)

EM ASIA FX-Asia FX mostly firmer, rupee and peso lead gains

07 Mar 2019

* Rupee below 70/USD * Peso up after week of policy easing talk * Thai foreign outflows pick up in March (Adds text, updates prices) By Nikhil Nainan March 7 Most Asian currencies rose on Thursday as investors awaited new catalysts after pricing in policy and geopolitical cues over the week, with the rupee at its firmest since the start of the year. Amid headlines from China's annual parliamentary meeting and monetary policy cues in other parts of Asia over the week, investors are awaiting progress on a trade deal as Washington and Beijing have been locked in intense negotiations to end a months-long trade war. The dollar index, which measures the greenback against a basket of six key rivals, traded sideways on Thursday at 96.878. The Philippine peso, which fell sharply earlier this week on cooling inflation and a new central bank governor that spurred talk of policy easing, rose 0.2 percent to 52.1. Meanwhile, the Indian rupee fell below the 70 rupee per dollar level for the first time since early January, after a sharp rise in early trade, buoyed by rising fund inflows. The unit was last at 69.993. However, a Reuters poll showed that the rupee's weak start to 2019 is an indication of how it will perform over the coming year citing uncertainty ahead of a general election in May and a potential trade conflict with the United States. The yuan inched up against the dollar to 6.710, paring losses from a near two-week low hit the previous session. Its value also surged on a trade-weighted basis against a basket of its trading partners' currencies, rising to 95.29, according to Reuters calculations based on official data, the highest level since early July. Indonesian markets were closed for a public holiday. TALE OF TWO HALVES The baht edged 0.1 percent lower to 31.870, bucking the overall trend, ahead of a ruling by the Constitutional Court later on Thursday. The court will rule on whether to ban an opposition party for nominating a princess as its candidate for prime minister in a general election. OCBC said in a note on Wednesday that "tomorrow's ruling will be worth closely monitoring as it may trigger a start of heightened political risks that could derail the Thai economy." The currency started the year with strong gains, making it the region's best performer, which raised concerns that it could harm the country's export growth. But it later eased with the central bank on Monday saying the baht is likely to remain volatile and that it had taken action on excessive moves to help the private sector adjust. A Thailand-based trader who did not wish to be named said foreign outflows have weighed on the currency as investors look to reduce their risk ahead of upcoming elections. Foreign investors have sold $244.6 million in Thai equities in March as of Wednesday's close, compared to $393.5 million of outflows in the last one month as of Wednesday's close. CURRENCIES VS U.S. DOLLAR Change on the day at 0459 GMT Currency Latest bid Previous day Pct Move Japan yen 111.670 111.75 +0.07 Sing dlr 1.357 1.3573 +0.06 Taiwan dlr 30.861 30.852 -0.03 Korean won 1127.700 1128.8 +0.10 Baht 31.870 31.84 -0.09 Peso 52.100 52.2 +0.19 Rupee 69.993 70.28 +0.41 Ringgit 4.082 4.087 +0.12 Yuan 6.710 6.7125 +0.03 Change so far in 2019 Currency Latest bid End 2018 Pct Move Japan yen 111.670 109.56 -1.89 Sing dlr 1.357 1.3627 +0.46 Taiwan dlr 30.861 30.733 -0.41 Korean won 1127.700 1115.70 -1.06 Baht 31.870 32.55 +2.13 Peso 52.100 52.47 +0.71 Rupee 69.993 69.77 -0.32 Ringgit 4.082 4.1300 +1.18 Yuan 6.710 6.8730 +2.42 (Reporting by Nikhil Kurian Nainan in Bengaluru Editing by Jacqueline Wong)

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