Asian units slip as trade rift moves awaited; Indian rupee falls most

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BENGALURU (June 27): Most Asian currencies edged down on Wednesday as investors waited to see the next development in the trade tussle involving the United States and China.

"At this stage, we may be reduced to headline watching with regards to Asian currencies," OCBC's Terence Wu said in a research note.

On Tuesday, US President Donald Trump endorsed Treasury Secretary Steven Mnuchin's measured approach to restricting Chinese investments in US technology companies, saying a strengthened merger security review committee could protect sensitive American technologies.

"Overnight, Trump appeared to be less confrontational regarding Chinese investment restrictions, and this may provide some temporary reprieve for Asian currencies," Wu said.

"Nevertheless, expect sentiments to remain jittery ahead of the (US government) report on Chinese investments due Friday, and the 6 July deadline for tariff imposition."

Among regional currencies, the Chinese yuan was among Wednesday's biggest losers, touching its weakest against the dollar since Dec 19 during the session.

The Chinese central bank had set the yuan's official midpoint weaker for a sixth straight session.

The South Korean won and the similarly export-oriented Taiwan dollar dipped 0.28 and 0.12%, respectively.

The Indian rupee lost the most for the day by falling 0.34%. India has been plagued by inflation concerns with rising prices of oil, a major driver of its current account deficit.

Brent crude prices were up 0.5% to US$76.65 per barrel on Wednesday following supply disruptions in Libya and Canada and after US officials told oil importers to stop buying Iranian crude from November.     

The Thai baht did not move after Thailand's manufacturing production index in May rose 3.2% from a year earlier, below the 3.5% rise forecast by a Reuters poll.

Indonesia's rupiah did not trade on Wednesday due to a holiday. The central bank, which raised the key interest rate twice in May, is likely to hike it again on Friday to give the fragile rupiah more support, a Reuters poll showed.

The Philippine peso bucked Wednesday's trend to gain about 0.31%, helped by a pick-up in investor sentiment in the equity market. The Philippines' equity benchmark was trading up to 1.5% higher, after advancing for the first time in nine sessions on Tuesday.

The following table shows rates for Asian currencies against the dollar at 0446 GMT.

Change on day at 0446 GMT

Currency                   Latest bid  Previous day   % move
Japan yen                  109.950           110.05      +0.09
Sing dlr                   1.363             1.3630      +0.03
Taiwan dlr                 30.450            30.412      -0.12
Korean won                 1117.900          1114.8      -0.28
Baht                       32.980             32.99      +0.03
Peso                       53.455            53.639      +0.34
Rupee                      68.458             68.24      -0.32
Ringgit                    4.025              4.021      -0.10
Yuan                       6.598             6.5797      -0.27

* Indonesia currency market closed for a holiday

Change so far in 2018

Currency                   Latest bid  End 2017       % move
Japan yen                  109.950           112.67      +2.47
Sing dlr                   1.363             1.3373      -1.86
Taiwan dlr                 30.450            29.848      -1.98
Korean won                 1117.900         1070.50      -4.24
Baht                       32.980             32.58      -1.21
Peso                       53.455            49.977      -6.51
Rupiah                     14173.000          13565      -4.29
Rupee                      68.458             63.87      -6.70
Ringgit                    4.025             4.0440      +0.47
Yuan                       6.598             6.5069      -1.38