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EM ASIA FX-Some Asian currencies slip as investors look for new positives after Fed hike
March 21, 2017 / 6:47 AM / 8 months ago

EM ASIA FX-Some Asian currencies slip as investors look for new positives after Fed hike

    * Some Asian currencies take breather after last week's
gains
    * Technical indicator suggests some Asia FX may be
overbought
    * Won hits highest since October as local equities gain

 (Adds detail, updates prices)
    By Patturaja  Murugaboopathy 
    March 21 (Reuters) - Some Asian currencies weakened slightly
on Tuesday as investors looked for fresh cues following the
currencies' big gains last week on the U.S. Federal Reserve's
moderately dovish stance.
    There was not much reaction to comments by Chicago Fed 
President Charles Evans, who reinforced the perception that the
U.S. central bank would not accelerate the pace of its interest
rate hikes.
    The Taiwan dollar saw slight gains on the back of
strong equity markets, while the Philippine peso
declined because of a rise in importer dollar demand.
 
    The Thai baht and the Singapore dollar also
traded weaker against the U.S. dollar. 
    "Markets are hard-pressed to look for new and enduring
themes. And none emerge; at least not compellingly so," Mizhuo
Senior Economist Vishnu Varathan said in a note.
    Technical indicators such as the relative strength index
showed that some Asian currencies were near over-bought levels.
    Ever since the Fed's interest rate projections released last
week showed that it was sticking to its outlook for a total of
three rate hikes this year, rather than increasing the
projection to four hikes, the won has risen more than 2 percent.
The Taiwan dollar and baht are up more than 1 percent. 
      
    "The USD may rebound intermittently as some regional
currencies such as the TWD and THB have been technically
overbought." Qi Gao, FX strategist for Scotiabank in Singapore,
said in a research note.
    The reversal in U.S Treasury yields after two days of
declines did not help emerging Asian currencies either.  The
10-year U.S. Treasury yield stood at 2.4789 percent
on Tuesday, slightly up from Monday's U.S. close of 2.472. A
steady fall in the U.S Treasury yields drove investors to the
emerging markets last week.
    Analysts said Asian currencies were also cautious amid some
Brexit uncertainty, the French presidential election, and next
month's European Central Bank policy meeting.
    
    SOUTH KOREAN WON
    The South Korean won rose to 1,114.0 per dollar
at one point, the won's highest level since October 11, 2016.
    The won's rise came as domestic equities rose, with the main
index hitting a two-year high on expectations of upbeat
first-quarter earnings.
    Foreigners have bought a net $2.8 billion of South Korean
equities so far this month, about 10 times their level of
investment in February, the exchange data showed.
    The won is Asia's best performer against the dollar this
year, with an 8 percent gain.

 CURRENCIES VS U.S. DOLLAR
    
  Change on the day at                                        
        0640 GMT                                    
  Currency                 Latest bid     Previous    Pct Move
                                               day  
  Japan yen               112.720           112.55       -0.15
  Sing dlr                1.398             1.3965       -0.14
  Taiwan dlr              30.417            30.527       +0.36
  Korean won              1120.300          1120.1       -0.02
  Baht                    34.740             34.71       -0.09
  Peso                    50.175             50.09       -0.17
  Rupiah                  13318.000          13312       -0.05
  Rupee                   65.280             65.36       +0.12
  Ringgit                 4.427              4.425       -0.05
  Yuan                    6.899             6.9090       +0.15
                                                              
  Change so far                                               
  Currency                Latest bid   End 2016       Pct Move
  Japan yen               112.720           117.07       +3.86
  Sing dlr                1.398             1.4490       +3.62
  Taiwan dlr              30.417            32.279       +6.12
  Korean won              1120.300         1207.70       +7.80
  Baht                    34.740             35.80       +3.05
  Peso                    50.175             49.72       -0.91
  Rupiah                  13318.000          13470       +1.14
  Rupee                   65.280             67.92       +4.04
  Ringgit                 4.427             4.4845       +1.30
  Yuan                    6.899             6.9467       +0.70
 

 (Reporting by Patturaja Murugaboopathy)
  
 
 

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