EM ASIA FX-Asian currencies skid on dollar recovery; peso extends fall

(Adds text, updates prices)

By Patturaja Murugaboopathy

Jan 17 (Reuters) - Most Asian currencies slipped on

Wednesday as the dollar rebounded from a three-year low, with

the Philippine peso shedding half a percent on concerns

of widening trade deficit.

The dollar index against a basket of six major currencies

was up 0.2 percent at 90.569 after hitting its lowest

since December 2014 at 90.113.

The peso extended its fall to its lowest in more than a

month on higher dollar buying by corporates on Wednesday.

Data out last week showed the Philippines' trade deficit

rose to a record of $3.78 billion in November, putting the

nation on track for its first annual current account deficit in

15 years.

The Indian rupee jumped more than a quarter

percent on news that the government has cut its additional

market borrowing requirement by 60 percent for the current

fiscal year.

The news sent benchmark 10-year bond yields down by 15 basis

points. Indian bond yields have risen by more than 100 basis

points since June last year on concerns that the government may

overshoot its fiscal deficit target.

The South Korean won was down 0.5 percent on the

day.

Finance Minister Kim Dong-yeon said authorities will leave

foreign exchange rates to market participants but take action if

needed.

The won gained more than 12 percent in 2017, making it the

top performer among Asian currencies against the dollar.

The Thai baht was flat on the day, after having

gained 2 percent this year.

The central bank governor said on Wednesday that the bank

has found "unusual speculation" in the baht from some local

financial institutions, but noted recent strength in the

currency is expected to have only a limited impact on exports.

The Malaysian ringgit climbed on higher oil prices,

before giving up some of its gains as the dollar recovered.

Some analysts said they expect markets to be cautious ahead

of key events such as Germany's Social Democrat (SPD), European

Central bank and Bank of Japan meetings later in the month.

The Cboe Volatility Index, often referred to as Wall

Street's "fear index", jumped to a six-week high on Wednesday.

A higher index reflects dampening risk sentiment which

undermines regional currencies.

However, Khoon Goh, head of Asia research at ANZ Banking

Group, is bullish on the outlook for Asian currencies.

"Normally a rise in volatility tends to be a negative for

Asian currencies, but in the current environment, we are seeing

bigger period of dollar weakness that is more than offsetting

the rise in the VIX," Goh said.

China's yuan was flat after rising earlier in the

day, as the central bank set its firmest midpoint in more than

two years.

The following table shows rates for Asian currencies against

the dollar at 0611 GMT.

CURRENCIES VS U.S. DOLLAR

Change on the day at 0611 GMT

Currency Latest bid Previous day Pct Move

Japan yen 110.790 110.44 -0.32

Sing dlr 1.323 1.3207 -0.20

Taiwan dlr 29.543 29.555 +0.04

Korean won 1067.700 1062.7 -0.47

Baht 31.984 31.95 -0.11

Peso 50.740 50.49 -0.49

Rupiah 13347.000 13337 -0.07

Rupee 63.960 64.03 +0.11

Ringgit 3.950 3.954 +0.10

Yuan 6.436 6.4369 +0.02

Change so far in 2018

Currency Latest bid End 2017 Pct Move

Japan yen 110.790 112.67 +1.70

Sing dlr 1.323 1.3373 +1.05

Taiwan dlr 29.543 29.848 +1.03

Korean won 1067.700 1070.50 +0.26

Baht 31.984 32.58 +1.86

Peso 50.740 49.93 -1.60

Rupiah 13347.000 13565 +1.63

Rupee 63.960 63.87 -0.14

Ringgit 3.950 4.0440 +2.38

Yuan 6.436 6.5069 +1.10

(Reporting by Patturaja Murugaboopathy in Bengaluru; Editing by

Subhranshu Sahu)