EM ASIA FX-Asia FX hit by views dollar weakness won't last long; yuan at 1-week high as state banks buy

Last Updated: Tue, Nov 29, 2016 10:40 hrs

* China state-owned banks seen selling dollar for 2nd day-traders * Rupiah down on capital outflows; ringgit near 14-mth low on oil * Won gives up earlier gains; S.Korea President address eyed (Adds text, updates prices) By Jongwoo Cheon SINGAPORE, Nov 29 (Reuters) - Most emerging Asian currencies weakened on Tuesday on views that the dollar's weakness in the last few sessions won't last long, but China's yuan hit a one-week high as state-owned banks stepped in to buy the currency for a second day. Regional units started the day stronger on weakness in the dollar, but soon reversed as the U.S. currency recovered most of its slide against a basket of six major units. The Indonesian rupiah led regional losses on capital outflows, while the Malaysian ringgit hovered around a 14-month low hit last week amid doubts over producer cartel will be able to agree on any meaningful output cuts at a meeting this week. South Korea's won lost most of gains after touching a near two-week peak. Investors were keeping an eye on South Korean Park Geun-hye's address later in the day amid an intensifying political scandal. "The dollar's correction could be almost done unless we have weak U.S. NFP data," said Qi Gao, a FX strategist with Scotiabank in Singapore, referring to nonfarm payrolls data for November due on Friday. U.S. employers are predicted to add 175,000 jobs this month, compared to 161,000 in October, a Reuters poll showed. Gao said only a number below 150,000 would pressure the dollar. "So, it is still better to sell Asian currencies on rallies," Gao said. The ringgit, the won, the rupiah and the Singapore dollar are seen more vulnerable, he added. The U.S. dollar has retreated from a near 14-year peak hit last week as the recent gains were seen excessive. Still, the greenback's outlook remained bullish given the possibility of more U.S. interest rate hikes in 2017 than initially anticipated. If President-elect Donald Trump's administration adopts a policy of higher fiscal spending and protection of domestic industries, it would boost U.S. inflation and Treasury yields. RUPIAH The rupiah eased as foreign investors dumped Indonesian stocks over the previous 14 straight sessions, the longest selling streak since August 2015. During the period, foreign investors dumped a combined net 9.5 trillion rupiah ($700.9 million) worth of local equities. Indonesia's government bonds also saw an outflows of 20.3 trillion rupiah during the first 25 days of the month, finance ministry data showed. WON The won earlier gained as much as 0.4 percent to 1,166.3 per dollar, its strongest since Nov. 16, on exporters' demand for month-end settlements. Foreign investors also bought a net 159.8 billion won ($136.6 million) worth of Seoul shares by mid-afternoon, set to extend their buying spree in the main stock exchange to a three consecutive session. The South Korean currency pared most of earlier gains as analysts saw a chart resistance area around 1,164.0-1,165.0. At 1,164.7 per dollar, it has the 38.2 percent Fibonacci retracement of its weakness since Trump won the U.S. Presidential election on Nov. 8. Another resistance line stands at 1,164.0, the 23.6 percent retracement level of its depreciation from September through November. CURRENCIES VS U.S. DOLLAR Change on the day at 0430 GMT Currency Latest bid Previous day Pct Move Japan yen 111.98 111.92 -0.05 Sing dlr 1.4255 1.4239 -0.11 Taiwan dlr 31.788 31.802 +0.04 Korean won 1170.13 1170.40 +0.02 Baht 35.580 35.579 -0.00 Peso 49.780 49.710 -0.14 Rupiah 13555 13520 -0.26 Rupee 68.68 68.76 +0.11 Ringgit 4.4610 4.4600 -0.02 Yuan 6.8922 6.9083 +0.23 Change so far in 2016 Currency Latest bid End prev year Pct Move Japan yen 111.98 120.30 +7.43 Sing dlr 1.4255 1.4177 -0.55 Taiwan dlr 31.788 33.066 +4.02 Korean won 1170.13 1172.50 +0.20 Baht 35.580 36.000 +1.18 Peso 49.78 47.06 -5.46 Rupiah 13555 13785 +1.70 Rupee 68.68 66.15 -3.69 Ringgit 4.4610 4.2935 -3.75 Yuan 6.8922 6.4936 -5.78 (Reporting by Jongwoo Cheon; Editing by Kim Coghill)



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