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EM ASIA FX-Most Asia currencies subdued before China data, Thai baht falters

Fri, 12th Jul 2019 07:28

* Thai baht set for worst week since early March

* All eyes on China June trade data, widely seen to fall

* Dismal Singapore Q2 growth stokes recession fears (Adds text, updates prices)

By Devika Syamnath

July 12 (Reuters) - Most Asian currencies weakened on Friday as renewed doubts about the chances of a Sino-U.S. trade deal dampened appetite for riskier assets.

Investors were also anxiously waiting on trade data for June from China later in the day, which is expected to show weak exports in yet another sign of the broadening economic impact of the trade war.

The Thai baht weakened sharply after its central bank clamped down on speculative foreign inflows to temper rapid gains in Asia's best performing currency this year.

The currency was 0.8% lower on the day and set for its worst week since early March.

China's yuan was broadly unchanged ahead of the June trade data. Overall, currency traders in the region were uneasy after U.S. President Donald Trump said on Thursday that "China is letting us down" on promises it made on buying agricultural products from American farmers.

The South Korea won was also under pressure, down 0.4%, as a trade row between Seoul and Tokyo showed no signs of being resolved. South Korea on Thursday warned the U.S. of potential fallout from "undesirable" Japanese restrictions on exports of high-tech material to South Korea.

Monetary policy was another consideration for the regional markets, as analysts suggested most Southeast Asian economies were poised to jump on the policy easing bandwagon after the U.S. Federal Reserve offered clear signs of a near-term rate cut earlier this week.

"Central banks in Korea and Indonesia are likely to be next in line to ease policy," said ING in a note to clients.

"Korea's growth is poised for more weakness ahead from export declines," it added. South Korea's trade-reliant economy is among the most affected by trade and tech war pressures.


Singapore's dollar was 0.1% lower after dismal second quarter growth data that missed forecasts by a wide margin.

The economy grew at its slowest pace in a decade in the second quarter, raising bets that a recession and monetary policy easing were on the horizon.

The city state's export-driven economy leaves it particularly exposed to trade war ructions.

"The Singapore dollar has looked more wobbly with chat mounting of an out of meeting policy adjustment from the central bank – we wouldn't be surprised - and some regional underperformance here is not to be dismissed," said ING in a note.

The following table shows rates for Asian currencies against the dollar at 0519 GMT.


 Currency               Latest bid  Previous day  Pct Move
 Japan yen              108.320     108.48        +0.15
 Sing dlr               1.358       1.3568        -0.05
 Taiwan dlr             31.030      31.026        -0.01
 Korean won             1177.600    1173.5        -0.35
 Baht                   30.870      30.61         -0.84
 Peso                   51.180      51.19         +0.02
 Rupiah                 14075.000   14060         -0.11
 Rupee                  68.535      68.44         -0.14
 Ringgit                4.111       4.114         +0.07
 Yuan                   6.872       6.8740        +0.03
Change so far in 2019
 Currency               Latest bid  End 2018      Pct Move
 Japan yen              108.320     109.56        +1.14
 Sing dlr               1.358       1.3627        +0.38
 Taiwan dlr             31.030      30.733        -0.96
 Korean won             1177.600    1115.70       -5.26
 Baht                   30.870      32.55         +5.44
 Peso                   51.180      52.47         +2.52
 Rupiah                 14075.000   14375         +2.13
 Rupee                  68.535      69.77         +1.80
 Ringgit                4.111       4.1300        +0.46
 Yuan                   6.872       6.8730        +0.02
(Reporting by Devika Syamnath in Bengaluru Editing by Shri Navaratnam)

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