EM ASIA FX-China's yuan weakens as trade war fears resurface, most other Asian FX gain
* Sept trade data reignites rising trade tension fears
* Singapore dollar up after c.bank tightens policy
* Falling oil prices supports rupee to 1st weekly gain in 6
(Adds text, updates prices)
By Nikhil Nainan
Oct 12 (Reuters) - China's yuan weakened on Friday as
surprisingly strong export figures fed fears over its trade war
with the United States, while most other Asian currencies firmed
on Friday after being battered earlier in the week by fallout
from a global equity market sell-off.
U.S. Treasury bond prices rose overnight as investors flocked
to safety, pushing down yields. The falling yields, and a
smaller than expected rise in U.S. consumer prices helped push
the dollar near its weakest level this month against a
basket of six major currencies, and gave emerging market
currencies some relief.
The Indian rupee, Asia's worst performer this year,
strengthened 0.7 percent to 73.608, coming just a day after it
set yet another record low against the dollar.
Indian inflation figures out later are expected to show
consumer prices rose 4 percent in September, up from Augusts'
3.69 rise, and bang on the central bank's medium-term target of
4 percent.
The rupee was set to snap six weeks of straight losses,
helped by oil prices coming off recent highs and looking on
course to shed 4 percent this week.
But the currency remains hampered by India's large current
account deficit, and the central bank's apparent hesitancy
raising interest rates.
South Korea's won gained over 1.3 percent to
1,130.2 per dollar.
The unemployment rate in the country fell in September,
after setting an eight-year high in August.
SEPTEMBER EXPORT GROWTH - TO REVIVE TRADE WAR ANXIETY?
The yuan was trading 0.1 percent weaker against
the dollar at 6.896, halting three sessions of gains, as
unexpectedly strong China exports fueled worries that an
escalation in the Sino-U.S. trade war would continue.
September exports rose 14.5 percent from a year earlier,
Chinese customs data showed. That blew past forecasts for an 8.9
percent increase in a Reuters poll and was well above August's
9.8 percent gain.
It comes a day after U.S. President Donald Trump warned that
there was much more he could do that would hurt China's economy.
The data might offset reports on Thursday that the U.S.
Treasury staff had not labelled China as a currency manipulator
in its recommendation for the department's semi-annual report on
foreign exchange rate practices.
Still,, the yuan appears set to weaken against the dollar
for a second week, largely as a result of the sharp decline
suffered at the start of the week in reaction to the central
bank cutting the amount of cash that banks must hold as
reserves.
SINGAPORE DOLLAR
The Monetary Authority of Singapore (MAS) tightened monetary
policy for the second time this year, increasing the S$NEER
slope from 0.5 percent to 1 percent, supporting a 0.2 percent
gain in the city-state's dollar to 1.374 per U.S. dollar.
Analysts viewed today's decision as hawkish as the MAS
downplayed trade frictions and was upbeat about economic
activity. The MAS expects inflation pressures from higher oil
and food prices as well as an improving labour market.
"MAS is not yet done with policy normalisation, and a
further increase in the S$NEER is likely if the economy evolves
as the MAS expects,” said Khoon Goh, Head of Asean Research at
ANZ.
Mizuho bank analysts on the other hand, cautioned that
downside risk cannot be ignored and "the real issue is whether
the evolving US-China trade spat and/or global liquidity mop up
inadvertently result in an abrupt buckle in economic activity."
CURRENCIES VS U.S. DOLLAR
Change on the day at 0505 GMT
Currency Latest bid Previous day Pct Move
Japan yen 112.320 112.16 -0.14
Sing dlr 1.374 1.3764 +0.20
Taiwan dlr 30.870 31.105 +0.76
Korean won 1130.200 1144.4 +1.26
Baht 32.670 32.76 +0.28
Peso 54.080 54.06 -0.04
Rupiah 15190.000 15230 +0.26
Rupee 73.608 74.12 +0.70
Ringgit 4.152 4.158 +0.14
Yuan 6.896 6.8888 -0.10
Change so far in 2018
Currency Latest bid End 2017 Pct Move
Japan yen 112.320 112.67 +0.31
Sing dlr 1.374 1.3373 -2.65
Taiwan dlr 30.870 29.848 -3.31
Korean won 1130.200 1070.50 -5.28
Baht 32.670 32.58 -0.28
Peso 54.080 49.977 -7.59
Rupiah 15190.000 13565 -10.70
Rupee 73.608 63.87 -13.23
Ringgit 4.152 4.0440 -2.60
Yuan 6.896 6.5069 -5.64
(Reporting by Nikhil Kurian Nainan, additional reporting by
Sumeet Gaikwad in Bengaluru and Vatsal Srivastava; Editing by
Simon Cameron-Moore)