Asian currencies firm as trade tensions ease, peso dips on deficit news

* Wider Philippine trade deficit in July sees peso weaken
* Investors cautious on lack of trade developments
* India's rupee strengthens but remains above 72 level

(Adds text, updates prices)
By Nikhil Nainan
Sept 11 (Reuters) - The peso slipped after the Philippines
posted a wider than expected trade deficit for July, but most
Asian currencies took a breather in the absence of significant
developments in global trade hostilities.
The peso gave up 0.2 percent to 53.937 versus the
dollar in the wake of news that imports into the Philippines
grew at their fastest in two years while exports barely rose.

Big trade gaps and a wide current account deficits have
pressured the peso which now hovers around its weakest in 12
years against the U.S. dollar.
The trade deficit for July was $3.546 billion versus $3.188
billion in June, and well over double the $1.305 billion deficit
recorded in July 2017.
The dollar index was steady at 95.113 despite
advancing on an upbeat jobs report last week.
Having warned last week that he was ready to levy additional
taxes on practically all Chinese imports, U.S. President Donald
Trump was uncharacteristically quiet on trade on Monday.

Any developments though, might rekindle uncertainty among
emerging market investors, with China cautioning that it will
respond if the United States takes any new steps.
Mizuho Bank said Trump was not likely to tone down his
"pugilistic trade views on China" and neither was the U.S.
Federal Reserve likely to slow down rate hikes or trimming its
balance sheet.
"What is before us appears to be more a pause in an ongoing
shakedown rather than a possible U-turn back to exuberance,"
Mizuho said in a note.
China's yuan weakened 0.1 percent to 6.866 to the
dollar.
The Singapore dollar firmed 0.2 percent to S$1.376,
helped by the U.S. dollar's lacklustre performance.
With the strength in the greenback not expected to subside
anytime soon, OCBC Bank said in a note, "the Singapore dollar is
not out of the woods yet".
Indonesian and Malaysian markets were both closed for
respective public holidays, giving the fragile rupiah a
break.

INDIAN RUPEE
The rupee strengthened 0.2 percent to 72.315 after
wavering either side of flat for much of the session. It comes a
day after it slid to a record trough.
Despite Tuesday's pickup, the outlook for the rupee is
relatively bleak, facing a stern challenge from a combination of
higher oil prices, a widening current account deficit, and the
Fed's rate hike cycle.
DBS bank sees sustained pressure on the rupee from these
factors is likely to push it towards 75 to the dollar.
These factors have contributed to India's 10-year bond yield
rising to 8.156 percent, its highest since late
2014, as bond prices fell.

CURRENCIES VS U.S. DOLLAR
Change on the day at 0442 GMT
Currency Latest bid Previous day Pct Move
Japan yen 111.390 111.11 -0.25
Sing dlr 1.376 1.3785 +0.15
Taiwan dlr 30.824 30.830 +0.02
Korean won 1125.600 1128.4 +0.25
Baht 32.790 32.84 +0.15
Peso 53.937 53.85 -0.16
Rupee 72.315 72.45 +0.19
Yuan 6.866 6.8557 -0.14
Change so far in 2018
Currency Latest bid End 2017 Pct Move
Japan yen 111.390 112.67 +1.15
Sing dlr 1.376 1.3373 -2.84
Taiwan dlr 30.824 29.848 -3.17
Korean won 1125.600 1070.50 -4.90
Baht 32.790 32.58 -0.64
Peso 53.937 49.977 -7.34
Rupee 72.315 63.87 -11.68
Yuan 6.866 6.5069 -5.22


(Reporting by Nikhil Kurian Nainan in Bengaluru)



First Published: 2018-09-11 03:50:34
Updated 2018-09-11 08:23:49


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