EM ASIA FX-Dollar retreat supports Asia FX; yuan turns weaker

Last Updated: Tue, Oct 18, 2016 11:00 hrs

* Yuan hits 6-year low again; China Q3 growth seen at 6.7 pct * Won gains as foreigners continue buying Korean equities * Baht rises; capital outflows limit upside (Adds text, updates prices) By Jongwoo Cheon SINGAPORE, Oct 18 (Reuters) - Most emerging Asian currencies rebounded on Tuesday with the dollar taking a breather, while fragile risk sentiment curbed the prospect of further upside for regional currencies. China's yuan started the day firmer but reversed course to hit another six-year low ahead of Chinese economic data on Wednesday. Third-quarter growth in the world's second-largest economy was seen steady at 6.7 percent on increased government spending and a property boom, a Reuters poll showed. The South Korean won led regional appreciation on sustained stock inflows. The Thai baht gained as most government bond prices rose with foreigners adding local debt holdings. Malaysia's ringgit rose as gains in crude prices eased concerns over the country's oil and gas revenues. The dollar fell against a basket of six major currencies after recently strengthening as markets priced in expectations for a Federal Reserve rate increase in December, a growing headwind for emerging markets. Federal Reserve Vice Chairman Stanley Fischer said on Monday that economic stability could be threatened by low interest rates, but it was "not that simple" for the Fed to raise rates. Despite the greenback's retreat, emerging Asian currencies may not strengthen much as investors stay wary of higher U.S. rates as well as uncertainties surrounding U.S. elections and Britain's exit from the European Union, analysts said. "USD/Asia took a breather but should remain supported in coming months as uncertainties over U.S. elections, December FOMC and Brexit linger," said Andy Ji, Asian currency strategist for Commonwealth Bank of Australia in Singapore, referring to the Federal Open Market Committee. WON The won rose as foreign investors were set to become net purchasers of Seoul shares for a fourth straight session. Concerns appeared to have been excessive over the impact on exports from Samsung Electronics Co Ltd's Galaxy Note 7 smartphone production halt, some analysts said. "The consumer electronics cycle is nowadays very short with new product launches happening at ever shorter cycles," said Frederic Neumann, co-head of Asian economic research at HSBC in Hong Kong. "In the course of about six months, any negative impact from the product cancellation will likely wear off." Foreign investors bought a combined net 229.1 billion won ($202.2 million) worth of Samsung stocks over the prior three consecutive sessions, a Korea Exchange official said. That compared with total stock inflows of 515.9 billion won to the main equity market during the period, according to the exchange data. BAHT The baht rose as foreign investors were poised to become net buyers in the local bond market on Tuesday after the recent selling spree, Thai Bond Market Association data showed. The Thai currency cut some of its earlier gains due to stock and bond outflows. Investors remained concerned over political uncertainty and the risk of economic slowdown in Thailand after the death of King Bhumibol Adulyadej. CURRENCIES VS U.S. DOLLAR Change on the day at 0515 GMT Currency Latest bid Previous day Pct Move Japan yen 103.92 103.88 -0.04 Sing dlr 1.3872 1.3895 +0.17 Taiwan dlr 31.712 31.770 +0.18 Korean won 1131.40 1137.90 +0.57 Baht 35.17 35.28 +0.32 Peso 48.500 48.525 +0.05 Rupiah 13043 13067 +0.18 Rupee 66.75 66.89 +0.21 Ringgit 4.2035 4.2150 +0.27 Yuan 6.7400 6.7385 -0.02 Change so far in 2016 Currency Latest bid End prev year Pct Move Japan yen 103.92 120.30 +15.76 Sing dlr 1.3872 1.4177 +2.20 Taiwan dlr 31.712 33.066 +4.27 Korean won 1131.40 1172.50 +3.63 Baht 35.17 36.00 +2.36 Peso 48.50 47.06 -2.97 Rupiah 13043 13785 +5.69 Rupee 66.75 66.15 -0.89 Ringgit 4.2035 4.2935 +2.14 Yuan 6.7400 6.4936 -3.66 (Reporting by Jongwoo Cheon; Editing by Jacqueline Wong)



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