EM ASIA FX-Asian units fall on US tariffs, recover on hopes tensions can ease
(Adds analyst comments, price moves and graphic)
By Patturaja Murugaboopathy
Sept 18 (Reuters) - Most emerging Asian currencies fell
early on Tuesday on news the United States was imposing more
tariffs on imports from China, but some recovered as Beijing did
not quickly announce retaliatory moves.
U.S. President Donald Trump said on Monday that he will
impose 10 percent U.S. tariffs on about $200 billion worth of
Chinese imports and warned he would pursue more tariffs if China
retaliates.
Up until now, the United States and China have applied
tariffs to $50 billion of each other's goods.
As of 0600 GMT Tuesday, the Chinese government had not
issued a statement on the U.S. move.
But on Tuesday morning, China released comments by Commerce
Minister Zhong Shan on Monday to foreign investors that "there
was no winner in a trade war and that cooperation was the only
correct choice".
The comments provided some lift to China's yuan
and other regional currencies.
The yuan, which fell as much as 0.35 percent early on
Tuesday, trimmed its losses to just 0.1 percent.
Traders said the renewed Sino-U.S. trade tension piled
pressure on the yuan, but market participants refrained from
aggressively testing lows for fear the authorities may quickly
step in.
The minister's remarks are "supporting Asian currencies'
sentiment on hopes that negotiations can proceed from here,"
said Chang Wei Liang, FX strategist at Mizuho Bank.
The Thai baht, Singapore dollar and the
South Korean won gained on the day, taking cues from
the rebound in the yuan.
Thailand, Singapore and South Korea form a major part of
China's supply chain and their currencies are the most affected
if trade tensions escalate between the United States and China.
The Indonesian rupiah led the regional decliners on
the day, shedding more than 0.3 percent.
Saktiandi Supaat, head of FX research at Maybank, said the
central bank intervention in the rupiah and bond markets and
"increasing speculation that BI (Bank Indonesia) could act again
by hiking its policy rate through an out-of-cycle meeting"
should help the currency.
A Bank Indonesia deputy governor said on Tuesday the central
bank will intervene in the market in a "measured manner" to
maintain rupiah stability.
With a fall of 9.1 percent, the rupiah is the second biggest
loser in Asia this year, after the Indian rupee
Declines in the crude oil prices propped up the Indian
rupee. India is a major oil importer and lesser oil prices tend
to reduce the external deficits, strengthening the rupee.
"Focus is less on the EM stress points and shifted towards
the trade war so the rupee is likely to be less hurt vs. other
regional FX," said Maybank's Supaat.
The following table shows rates for Asian currencies against
the dollar at 0540 GMT.
CURRENCIES VS U.S. DOLLAR
Change as of 0540
GMT
Currency Latest Previous Pct
bid day Move
Japan yen 111.950 111.83 -0.11
Sing dlr 1.371 1.3717 +0.05
Taiwan dlr 30.807 30.805 -0.01
Korean won 1125.90 1126.6 +0.06
0
Baht 32.580 32.63 +0.15
Peso 54.140 54.11 -0.06
Rupiah 14925.0 14870 -0.37
00
Rupee 72.465 72.51 +0.06
Ringgit 4.144 4.137 -0.17
Yuan 6.864 6.8553 -0.12
Change so far in
2018
Currency Latest End 2017 Pct
bid Move
Japan yen 111.950 112.67 +0.64
Sing dlr 1.371 1.3373 -2.46
Taiwan dlr 30.807 29.848 -3.11
Korean won 1125.90 1070.50 -4.92
0
Baht 32.580 32.58 +0.00
Peso 54.140 49.93 -7.78
Rupiah 14925.0 13565 -9.11
00
Rupee 72.465 63.87 -11.8
6
Ringgit 4.144 4.0440 -2.41
Yuan 6.864 6.5069 -5.20
(Reporting by Patturaja Murugaboopathy in Bengaluru; Editing by
Richard Borsuk)