Company News

EM ASIA FX-U.S. rate hike fears, slow China services data sap Asian currencies

    * EM Asia currencies weaken, Indian rupee leads declines
    * Slow Indonesia Q3 GDP unlikely to affect monetary policy -

 (Adds text, updates prices)
    By Devika Syamnath
    Nov 5 (Reuters) - Most Asian currencies weakened on Monday
after robust labour data signalled faster interest rate hikes in
the United States, while a slowdown in China's service sector
further sapped sentiment. 
    China's yuan hit 6.914 to the dollar at 0543 GMT,
flirting with the psychologically important 7 to the dollar mark
and down 0.4 percent against the greenback for the day. 
    October's sluggish services sector numbers cemented signs of
slowing in China's economy, spurring on nervous investors who
were already funnelling funds out of riskier, emerging market
assets hit by growing global trade tensions.
    Surging U.S. job and wage data for the month signalled
better economic prospects for the United States, setting it on a
path of further interest rate hikes.
    "Looking at non-farm (payrolls) and wages growth it is clear
the Fed is going to stay the course, hike in December and then
set itself toward more hikes in 2019," said Greg McKenna, an
independent analyst in Australia.
    Markets on Friday cheered reports that the leaders of China
and the United States were looking to resolve their differences
over trade, but worries surfaced that a deal may not be
imminent, undermining sentiment in Asia.

    The Indian rupee led decliners, weakening 0.7
percent. Among regionals, the rupee has lost the most against
the dollar this year - more than 12 percent to date.

    While softer oil prices have given some respite to Asian
currencies such as the rupee, Indonesia's rupiah and the
Philippines peso, worsening global trade worries and
growth concerns continue to weigh.
    The rupiah was down 0.2 percent against the greenback, while
the peso weakened 0.3 percent.
    Indonesia's economic growth slowed in the third quarter,
pointing to tougher conditions for the Southeast Asian country's
economy, which has struggled with outflows from its financial
    "The GDP outturn today is unlikely to affect monetary
policy, which will continue to be driven by movements in the
IDR," said ANZ in a note.
    The Thai baht weakened 0.4 percent to the dollar.     
    "U.S. mid-term elections tomorrow which will likely take
centre stage," OCBC said in a note to clients. 
    "Polls suggest that the Democrats will retake the House (of
Representatives) while Republicans will retain the Senate, but
any surprises either way may see financial markets react,
possibly violently," it noted.
    The Malaysian ringgit slipped 0.2 percent against the
dollar on Monday. 
    "A frosty market reception to the latest Malaysia budget
announcement (a significantly larger than expected 2018 budget
deficit pencilled-in) will be expected to exert reactive
downside pressure on the MYR and govies (government bonds)," 
OCBC noted.  
    Malaysia unveiled an expanded budget on Friday and set a
higher fiscal deficit target for 2019 while forecasting this
year's deficit to be its highest in five years.  
    The country's new government is tackling the double-headed
dragon of boosting revenue in a slowing economy, while saddled
with large debts left by its predecessor.
    However, Malaysia posted its largest trade surplus in a
decade in September, with exports driven by demand for
manufactured products, crude oil and liquefied natural gas.

    The following table shows rates for Asian currencies against
the dollar at 0543 GMT.
 Currency                     Latest bid  Previous day  Pct Move
 Japan yen                    113.260     113.18        -0.07
 Sing dlr                     1.376       1.3747        -0.10
 Taiwan dlr                   30.705      30.738        +0.11
 Korean won                   1122.700    1121.6        -0.10
 Baht                         32.940      32.81         -0.39
 Peso                         53.240      53.087        -0.29
 Rupiah                       14980.000   14950         -0.20
 Rupee                        72.948      72.44         -0.70
 Ringgit                      4.168       4.16          -0.19
 Yuan                         6.914       6.8870        -0.39
 Change so far in 2018                                  
 Currency                     Latest bid  End 2017      Pct Move
 Japan yen                    113.260     112.67        -0.52
 Sing dlr                     1.376       1.3373        -2.82
 Taiwan dlr                   30.705      29.848        -2.79
 Korean won                   1122.700    1070.50       -4.65
 Baht                         32.940      32.58         -1.09
 Peso                         53.240      49.977        -6.13
 Rupiah                       14980.000   13565         -9.45
 Rupee                        72.948      63.87         -12.44
 Ringgit                      4.168       4.0440        -2.98
 Yuan                         6.914       6.5069        -5.88

 (Reporting by Devika Syamnath in Bengaluru; editing by Eric