* Taiwan dollar firms ahead of trade data
* China's yuan strengthens ahead of a week of key data
* Investors take a breather from U.S.-China trade tensions
(Adds text, updates prices)
By Nikhil Nainan
July 9 (Reuters) - Most Asian currencies strengthened on
Monday, as the dollar struggled near 3-1/2 week lows after
closely-watched U.S. wages indicators disappointed the market.
Riskier assets globally, including the regional currencies,
took some respite from an escalation of the Sino-U.S. trade
dispute after both countries on Friday slapped tit-for-tat
tariffs on each others' goods.
The dollar index against a basket of six major
currencies was 0.1 percent lower at 93.915.
"The relief is that markets have not lurched down a cliff on
fears of a full-blown trade war... Perhaps on hopes that
returning to the negotiation table to soften the blow is still
an option," Mizuho analysts said in a note.
However, they warned, "the calm after the storm remains as
tentative as it is tenuous, and certainly no lasting relief from
better than expected U.S. jobs data should be expected."
The U.S. economy created more jobs than expected in June,
but steady wage gains pointed to moderate inflation pressures
that should keep the Federal Reserve on a path of gradual
interest rate increases this year.
Taiwan's dollar gained 0.4 percent against its U.S.
peer, hours ahead of exports data which is expected to show
solid, albeit slightly moderating growth.
The Indian rupee, the worst performing Asian
currency this year, was up 0.3 percent. Inflationary concerns
from higher oil prices and the fiscal cost of a recent hike in
minimum support prices, a government program that buys crops
from farmers, are expected to cap gains.
"A confluence of a challenging external environment, high
oil prices and likelihood of expansionary domestic policies
(e.g. recent MSP) keep the August hike risks on the table," DBS
said in a note.
Indonesia's rupiah firmed 0.2 percent to 14,338.
Perry Warjiyo, the country's central bank governor, flagged
U.S.-China trade tensions as a concern to growth.
Bank Indonesia has raised its benchmark rate by 100 basis
points so far this year to defend a fragile rupiah. The
government also recently announced a plan to review capital
goods imports to control the current account deficit.
The Philippine peso slipped to 53.410 against the
dollar after gaining 0.2 percent on Friday.
Data showing stronger-than-expected inflation earlier last
week added to increasing pressure on Bangko Sentral ng Pilipinas
to hike rates over and above the two made this year.
Trade data for May, expected on Tuesday, should provide a
cue for investors, after April's deficit widened to a four-month
high and added further strain on the struggling peso.
The Chinese yuan, which has been hit hard
recently amid the intensifying Sino-U.S. trade row, was 0.4
percent firmer at 6.623 per dollar as investors looked ahead to
a data-heavy week.
"Growth remains the mainland's biggest priority hence the
markets will be extremely focused on this week's China tier one
economic data dump which will provide some exacting signpost for
evaluating China's economy," said Stephen Innes, head of trading
APAC at Oanda.
China's foreign exchange reserves unexpectedly rose $1.51
billion in June to $3.112 trillion, bolstered by an increase in
the value of its U.S. Treasury holdings.
Inflation, loans and merchandise trade data are also due
CURRENCIES VS U.S. DOLLAR
Change on the day at 0528 GMT
Currency Latest bid Previous day Pct Move
Japan yen 110.450 110.44 -0.01
Sing dlr 1.357 1.3571 +0.04
Taiwan dlr 30.389 30.500 +0.37
Korean won 1111.100 1115.9 +0.43
Baht 33.110 33.17 +0.18
Peso 53.410 53.313 -0.18
Rupiah 14338.000 14365 +0.19
Rupee 68.690 68.87 +0.27
Ringgit 4.033 4.038 +0.12
Yuan 6.623 6.6489 +0.39
Change so far in 2018
Currency Latest bid End 2017 Pct Move
Japan yen 110.450 112.67 +2.01
Sing dlr 1.357 1.3373 -1.42
Taiwan dlr 30.389 29.848 -1.78
Korean won 1111.100 1070.50 -3.65
Baht 33.110 32.58 -1.60
Peso 53.410 49.977 -6.43
Rupiah 14338.000 13565 -5.39
Rupee 68.690 63.87 -7.02
Ringgit 4.033 4.0440 +0.27
Yuan 6.623 6.5069 -1.76
(Reporting by Nikhil Kurian Nainan in Bengaluru
Editing by Shri Navaratnam)