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EM ASIA FX-Rally in Asian FX slows as markets reassess Sino-US trade truce

(Adds text, updates prices)

By Patturaja Murugaboopathy

Dec 4 (Reuters) - The Chinese yuan led most Asian currencies

higher on Tuesday, though a prior day rally sparked by the

temporary U.S.-China trade truce slowed on questions over

whether the two sides can strike a durable deal.

Rising crude oil prices also undermined currencies of key

energy importers in the region.

While markets initially applauded the U.S.-China trade

truce, the lack of specificity in the temporary agreement struck

between presidents Donald Trump and Xi Jinping over the weekend

in Argentina has raised concerns about the fragility of the


"Details of the weekend Xi-Trump dinner remain scant from

Beijing and the White House. Even within the US administration,

we are seeing different interpretations, and attempts to dial

back on the expectations of the outcome," said Terence Wu,

currency strategist at OCBC Bank.

"Markets now run the risk of China eventually not

corroborating the declarations from the US front, and may now be

moderating the optimism it drew from the Xi-Trump outcome."

The South Korean won tacked on just 0.2 percent,

compared with its near 1 percent gain on Monday, while the

Taiwan dollar and the Singapore dollar also

inched higher.

Global crude oil prices rose for the second

successive day on Tuesday and weighed on the Indonesian rupiah

, Indian rupee and the Philippine peso

- the currencies of three major importers of oil in


Outperforming its regional peers, China's yuan

advanced 0.7 percent against the dollar, while the Malaysian

ringgit also climbed higher.

Meanwhile, foreigner investors have accelerated their buying

in Asian equities this month, data from regional exchanges

showed. They purchased $ 511 million worth of equities in

Philippines, Thai, Vietnam, Indonesian, Indian and South Korean

markets on Monday, adding to their total purchases of $2.5

billion in November.

"We are still favourable on Asian currencies as a whole into

the year end, on a strong portfolio inflow momentum, low crude

prices and positive sentiments towards EM Asia," said OCBC's Wu.

"We expect the Korean won and Taiwan dollar to mirror the

yuan movements, while the Indonesian rupiah and Indian rupee

may continue to outperform as they remain more attractive in

real yield terms."

The dollar index fell nearly quarter of percent on

the day due to a slump in U.S. Treasury yields.

The yield spread between the U.S. 2-year and 10-year, which

is seen as predictor of a U.S. recession, tightened to its

smallest since July 2007.

However, Saktiandi Supaat, head of FX research at Maybank

said such worries are overblown as the 2-year-10-year spread is

still in positive territory.

The following table shows rates for Asian currencies against

the dollar at 0528 GMT.


Change as of 0528


Currency Latest Previous Pct

bid day Move

Japan yen 113.060 113.65 +0.52

Sing dlr 1.365 1.3668 +0.14

Taiwan dlr 30.696 30.752 +0.18

Korean won 1107.70 1110.7 +0.27


Baht 32.700 32.76 +0.18

Peso 52.505 52.32 -0.35

Rupiah 14275.0 14235 -0.28


Rupee 70.405 70.45 +0.06

Ringgit 4.149 4.163 +0.34

Yuan 6.841 6.8855 +0.65

Change so far in


Currency Latest End 2017 Pct

bid Move

Japan yen 113.060 112.67 -0.34

Sing dlr 1.365 1.3373 -2.02

Taiwan dlr 30.696 29.848 -2.76

Korean won 1107.70 1070.50 -3.36


Baht 32.700 32.58 -0.37

Peso 52.505 49.93 -4.90

Rupiah 14275.0 13565 -4.97


Rupee 70.405 63.87 -9.28

Ringgit 4.149 4.0440 -2.53

Yuan 6.841 6.5069 -4.89

(Reporting by Patturaja Murugaboopathy in Bengaluru; Additional

Reporting by Gaurav Dogra

Editing by Shri Navaratnam)