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EM ASIA FX-Asian currencies subdued, US tax reform plans in focus

ForexNov 09, 2017 11:10
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© Reuters. EM ASIA FX-Asian currencies subdued, US tax reform plans in focus

(Adds text, updates prices)

By Patturaja Murugaboopathy

Nov 9 (Reuters) - Asian currencies were shackled on Thursday as investors pondered the impact on the dollar stemming from potential delays to U.S. President Donald Trump's major tax reform plans.

Those considerations, along with an absence of catalysts, kept most regional currencies subdued. The dollar hardly budged either, last fetching 94.926 .DXY versus a basket of six major currencies, up 0.1 percent on the day.

There was little "tier-1 data" to drive regional currencies, said Christopher Wong, senior FX strategist for Maybank.

A U.S. Senate tax-cut bill, differing from one in the House of Representatives, was expected to be unveiled on Thursday, complicating a Republican tax overhaul push and increasing scepticism on Wall Street about the effort. Asian currencies will remain susceptible to the headlines on the U.S. tax bill, said Qi Gao, Asia FX Strategist at Scotiabank in a report.

The dollar stands to lose ground if the Senate tax bill delays plans to cut corporate taxes by one year, he said.

The Indian rupee INR=IN was supported by some dollar selling by exporters and IPO-related inflows, taking some pressure off the currency from higher oil prices.

Indian companies have raised about $8 billion from IPOs in India so far in what is set to be a record year. The recent HDFC Standard Life Insurance Co. Ltd's IPO will be the fourth to raise more than a billion dollars in 2017.

So far this month, foreigners have bought about $700 million in Indian equity markets.

It was a different story for the Philippine peso PHP=PDSP , which was kept in check by corporate demand for dollars and stock sales by foreigners, traders said.

On the policy front, central banks in Malaysia and the Philippines will meet to review rates later in the day and most analysts expect them to stand pat.

Markets will keep a close watch on the policy statement from the two central banks as they are expected to be among the first in the region to hike rates next year, said Bank of Tokyo-Mitsubishi UFJ said in a research note.

The Thai central bank left its policy interest rate unchanged on Wednesday. Indonesian rupiah IDR=ID was trading flat ahead of the release of current account data for the third quarter.

Indonesia had a deficit of $5.0 billion in its total foreign trade in goods and services in the second quarter, equal to 1.96 percent of gross domestic product. yuan CNY=CFXS inched up, supported in part by better-than-expected inflation data. following table shows rates for Asian currencies against the dollar at 0452 GMT.

CURRENCIES VS U.S. DOLLAR

Change on the day

at 0452 GMT

Currency

Latest Previous Pct Move

bid

day

Japan yen

113.84

113.86

+0.02 Sing dlr

1.3617

1.3616

-0.01 Taiwan dlr

30.176

30.187

+0.04 Korean won

1114

1115.6

+0.15 Baht

33.124

33.11

-0.04 Peso

51.270

51.3

+0.06 Rupiah

13512

13515

+0.02 Rupee

64.87

64.95

+0.12 Ringgit

4.227

4.228

+0.02 Yuan

6.631

6.6317

+0.01

Change so far in

2017

Currency

Latest End 2016

Pct Move

bid

Japan yen

113.84

117.07

+2.84 Sing dlr

1.3617

1.4490

+6.41 Taiwan dlr

30.176

32.279

+6.97 Korean won

1114

1207.70

+8.42 Baht

33.124

35.80

+8.08 Peso

51.270

49.72

-3.02 Rupiah

13512

13470

-0.31 Rupee

64.870

67.92

+4.70 Ringgit

4.227

4.4845

+6.09 Yuan

6.631

6.9467

+4.76

EM ASIA FX-Asian currencies subdued, US tax reform plans in focus
 

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