EM ASIA FX-Singapore dlr hits 7-mth low pre-MAS decision; China data hurts Asia FX

Source : REUTERS
Last Updated: Thu, Oct 13, 2016 11:40 hrs

* MAS seen on hold on Fri; surprise easing may hurt Sing dlr * Yuan at 6-year low on disappointing Sept China trade data * Baht barely moves amid concern on Thai King's health * Ringgit falls as Sept bond outflows revised to $2 bln (Adds text, updates prices) By Jongwoo Cheon SINGAPORE, Oct 13 (Reuters) - Singapore's dollar hit a seven-month low on Thursday, a day before a central bank monetary policy decision, while most emerging Asian currencies slid on disappointing Chinese trade data and expectations of a U.S. interest rate hike in December. Thailand's baht barely moved, while the benchmark share index was down 2 percent amid growing concerns about the health of the 88-year-old King Bhumibol Adulyadej. The Singapore dollar lost 0.2 percent to 1.3866 per U.S. dollar, its weakest since March 10, and then pared much of that decline. The Monetary Authority of Singapore (MAS) is widely expected to keep its exchange-rate based policy steady in its semiannual review on Friday, a Reuters poll showed. But some investors and analysts saw a risk the MAS would announce monetary stimulus, which would pressure the Singapore dollar, as sluggish global demand keeps denting the trade-reliant economy. "Should the MAS surprise market consensus with some form of easing, it is likely that SGD will weaken fairly quickly past the 1.40 level against the USD," said Heng Koon How, senior FX investment strategist for Credit Suisse in Singapore. Some analysts expected a rebound in the Singapore dollar if the central bank stays pat, saying the currency has priced in minority's views of easing to some degree. However, Heng of Credit Suisse said the currency is unlikely to recover much as the U.S. dollar will stay firm on growing prospects that the Federal Reserve will raise interest rates in December. Among U.S. central bank policymakers, several voting members judged a hike would be warranted "relatively soon" if the world's biggest economy continued to strengthen but doubts on inflation remained, the minutes of the Fed's September meeting showed on Wednesday. CHINA WORRIES Most emerging Asian currencies extended losses after data showing China's September exports fell much more than projected while imports unexpectedly shrank. The Chinese yuan hit a six-year low, adding to prospects that the country may pursue a weaker currency policy in coming months. China's central bank set its daily guidance rate for a seventh day in a row to six-year lows, partially reflecting the dollar's strength during local holidays last week. "Although China appears to be making up for lost time with a seven-day run of higher USD/CNY fixes, there is more work to be done," said Sue Trinh, head of Asia FX strategy at Royal Bank of Canada in a note. "GDP growth in Q2 and Q3 was propped up by a housing bubble and huge state stimulus, but there are signs that these support factors are fading," she said. Malaysia's ringgit fell 0.5 percent to 4.2100 against the U.S. dollar, its weakest since Feb. 29. The central bank revised the September bond outflows figure to 8.4 billion ringgit ($2.0 billion) from the initial 1.4 billion ringgit, increasing concerns that foreigners may dump the country's bonds on expectations of Fed tightening. With the revision, September had the largest monthly bond outflows since August last year when the country's markets tumbled on a political crisis hitting Prime Minister Najib Razak and corruption allegations involving indebted state fund 1Malaysia Development Berhad (1MDB). The South Korean won lost 1.1 percent to 1,136.5 per U.S. dollar, its weakest since July 26, leading regional losses. Currency traders almost ignored the central bank decision to keep interest rates unchanged at 1.25 percent for a fourth consecutive month, as that was widely expected. The baht stayed around Wednesday's close of 35.73 per dollar. The Thai currency in the previous session touched a near nine-month trough. Foreign investors cut Thai bond holdings by 37.4 billion baht ($1.0 billion) in total so far this week, according to Reuters' calculation based on data from the Thai Bond Market Association. Offshore funds also were net sellers in the Bangkok stock market in the previous two sessions. Thailand's palace said on Wednesday the health of the king has "overall not yet stabilised". CURRENCIES VS U.S. DOLLAR Change on the day at 0545 GMT Currency Latest bid Previous day Pct Move Japan yen 103.78 104.18 +0.39 Sing dlr 1.3848 1.3845 -0.02 Taiwan dlr 31.715 31.629 -0.27 Korean won 1134.60 1123.60 -0.97 Baht 35.69 35.73 +0.12 Peso 48.470 48.540 +0.14 Rupiah 13040 13017 -0.18 Rupee 66.82 66.53 -0.43 Ringgit 4.2100 4.1900 -0.48 Yuan 6.7279 6.7200 -0.12 Change so far in 2016 Currency Latest bid End prev year Pct Move Japan yen 103.78 120.30 +15.92 Sing dlr 1.3848 1.4177 +2.38 Taiwan dlr 31.715 33.066 +4.26 Korean won 1134.60 1172.50 +3.34 Baht 35.69 36.00 +0.88 Peso 48.47 47.06 -2.91 Rupiah 13040 13785 +5.71 Rupee 66.82 66.15 -1.01 Ringgit 4.2100 4.2935 +1.98 Yuan 6.7279 6.4936 -3.48 (Reporting by Jongwoo Cheon; Additional reporting by Reuters FX Analyst Rick Lloyd; Editing by Richard Borsuk)



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