Yahoo Finance EM ASIA FX-Most Asian currencies gain on hopes of U.S.-China trade progress, supports yuan
* Yuan gets support from optimism over trade talks
* S.Korean won gains on rate hike talk
* Graphic: EM Asia FX rates in 2018 https://tmsnrt.rs/2CPp4pY
(Adds text, updates prices)
By Nikhil Nainan
Sept 13 (Reuters) - The Trump administration's invitation to
China for a new round of trade talks supported almost all Asian
currencies on Thursday, raising some optimism that a deal could
avoid tariffs and defuse U.S.-China tensions.
Senior U.S. officials in the Trump administration invited
their Chinese counterparts to restart bilateral trade talks on
Wednesday, ahead of the imposition of tariffs on $200 billion
worth of Chinese goods.
"The big boost for markets was arguably derived from the
silver linings of the storm clouds of trade wars," Mizuho Bank
said in a note.
However, Tai Hui, chief market strategist for JP Morgan
Asset Management, said in a morning note, "while we agree this
should provide short-term relief, the road ahead can still be
tricky".
Sino-U.S. trade tensions have hammered riskier assets
globally in recent months as policy makers and investors worried
about the impact of trade disruptions on the world economy.
China's yuan jumped on the news of resumed trade
talks, up 0.3 percent and near its strongest level against the
dollar in a week.
It was also supported by the People's Bank of China (PBOC)
setting the yuan's midpoint at 6.8488 per dollar.
The yuan last stood at 6.848 per dollar.
The Thai baht gained 0.4 percent to 32.640, even
though Thailand's finance minister had said there was no need to
increase interest rates at the moment.
The central bank is expected to meet on September 19, and
some analysts expect a rate hike, which would be the first since
2011.
OCBC Bank said in a note, "second quarter GDP (was) firmer
than expected; Bank of Thailand striking a new hawkish tone
should provide support."
A widely anticipated rate hike from the Turkish central
bank's policy meeting on Thursday is seen as a demonstration of
the bank's intent to shore up the lira and would likely reduce
fears of contagion amid a emerging market rout.
"Expect markets to continue to look to news flow (and
potential contagion) out of the emerging market complex, with
the Turkish central bank expected to hike rates today," OCBC
said. Rate hike predictions ranged between 225 to 725 basis
points.
The Philippine peso climbed 0.2 percent to 53.975 per
dollar, while Indonesia's rupiah was around 14,825 and
showing only small moves.
Markets in India were closed for a public holiday, with the
rupee getting some respite from a volatile week that
saw it touch multiple record lows and appreciate sharply on
Wednesday.
SOUTH KOREAN WON
The won sharply rose on Thursday, at one point
gaining as much 0.9 percent to 1,118.1, its strongest level
against the dollar in a week.
The won took strength from comments by Prime Minister Lee
Nak-yeon who suggested it was time to discuss raising interest
rates.
A senior government official said soon after that Lee's
comments did not aim to suggest any monetary policy direction.
South Korea's won slipped back slightly although it was still
0.6 percent stronger at 1,122.4 against the dollar.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0522 GMT
Currency Latest bid Previous day Pct Move
Japan yen 111.420 111.25 -0.15
Sing dlr 1.372 1.3718 -0.02
Taiwan dlr 30.781 30.825 +0.14
Korean won 1122.400 1128.6 +0.55
Baht 32.640 32.78 +0.43
Peso 53.975 54.06 +0.16
Rupiah 14825.000 14820 -0.03
Ringgit 4.142 4.142 +0.00
Yuan 6.848 6.8655 +0.26
Change so far in 2018
Currency Latest bid End 2017 Pct Move
Japan yen 111.420 112.67 +1.12
Sing dlr 1.372 1.3373 -2.54
Taiwan dlr 30.781 29.848 -3.03
Korean won 1122.400 1070.50 -4.62
Baht 32.640 32.58 -0.18
Peso 53.975 49.977 -7.41
Rupiah 14825.000 13565 -8.50
Rupee 72.185 63.87 -11.52
Ringgit 4.142 4.0440 -2.37
Yuan 6.848 6.5069 -4.98
(Reporting by Nikhil Kurian Nainan in Bengaluru; editing by
Eric Meijer)
