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Asia, Forex

Yuan losses weigh on Asian currencies, Korean won weakens most

* Yuan at weakest level since financial crisis * Indian rupee at lowest in 8 months, week’s worst performer * Korean won slides as trade crisis with Japan deepens * Thai baht sole gainer for the week, up 0.4% (Adds text, updates prices) By Rashmi Ashok Aug 23 (Reuters) – Most emerging Asian currencies slipped on Friday after China’s yuan weakened to its lowest level in 11-1/2 years, while the Korean won came under added pressure as its trade dispute with Japan escalated. The offshore yuan weakened briefly past 7.1 against the dollar, while onshore spot yuan slipped as low as 7.0992 per dollar, its weakest since March 2008. The People’s Bank of China (PBOC) set the midpoint rate at 7.0572 per dollar prior to market open – its weakest level in 11-1/2 years, although it was much stronger than traders had expected. The 7.1000 handle for both onshore and offshore yuan will be key to watch, OCBC Treasury Research said in a note. “We may enter a situation whereby the USD-RMB leads the rest of USD-Asia higher,” OCBC added. The Korean won slipped as much as 0.6%, pressured by the yuan’s latest fall and rapidly deteriorating ties with Japan. South Korea said on Thursday it will scrap an intelligence-sharing pact with Japan, drawing a swift protest from Tokyo and deepening a decades-old dispute which is now threatening to push Korea’s economy into further distress. The Indian rupee slid as much as 0.3% to 72.035 against the dollar, its weakest level since Dec. 14, 2018. The drop comes a day after minutes from the central bank’s monetary policy meeting revived expectations for further easing. Broader trade was cautious, however, as markets awaited U.S. Federal Reserve Chair Jerome Powell’s speech at a gathering of central bankers in Jackson Hole, Wyoming, later in the day (1400 GMT). “If Powell sounds less dovish or hawkish, it will spur risk aversion and undermine EM Asian currencies,” said Gao Qi, FX strategist at Scotiabank. All units weakened in the previous session, after minutes from the Fed’s July meeting showed policymakers were deeply divided on whether to cut interest rates last month, denting expectations of aggressive cuts in the future. For the week, the Thai baht was the sole gainer, up around 0.4%, while the rupee was the worst performer, shedding about 1.2%. The following table shows rates for Asian currencies against the dollar at 0513 GMT. CURRENCIES VS U.S. DOLLAR Currency Latest bid Previous day Pct Move Japan yen 106.570 106.42 -0.14 Sing dlr 1.388 1.3853 -0.16 Taiwan dlr 31.386 31.384 -0.01 Korean won 1212.200 1207.4 -0.40 Baht 30.780 30.7825 +0.01 Peso 52.380 52.31 -0.13 Rupiah 14240.000 14230 -0.07 Rupee 71.785 71.81 +0.03 Ringgit 4.188 4.188 +0.00 Yuan 7.093 7.0830 -0.14 Change so far in 2019 Currency Latest bid End 2018 Pct Move Japan yen 106.570 109.56 +2.81 Sing dlr 1.388 1.3627 -1.79 Taiwan dlr 31.386 30.733 -2.08 Korean won 1212.200 1115.70 -7.96 Baht 30.780 32.55 +5.75 Peso 52.380 52.47 +0.17 Rupiah 14240.000 14375 +0.95 Rupee 71.785 69.77 -2.81 Ringgit 4.188 4.1300 -1.38 Yuan 7.093 6.8730 -3.10 (Reporting by Rashmi Ashok in Bengaluru; Editing by Kim Coghill)

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