Most Asian currencies firm, India's rupee buoyed as oil prices ease

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BENGALURU (July 13): Most emerging Asian currencies edged up on Friday, shrugging off better-than-expected Chinese trade data as markets took a breather from a volatile week of Sino-US trade tensions.

Despite China's trade surplus coming in at its highest ever for any single month, according to Reuters data going back to 2008, the Chinese yuan cooled after earlier advances.

"The trade data, while is slightly better-than-expectations, does pre-date the implementation of the tariffs and markets at this stage are choosing to ignore the data because they are all largely historical," said Khoon Goh, ANZ's head of Asia research.

The crucial data here would be from July onwards to gauge the impact of the tariffs on activities, Goh added.

Friday brings the culmination of a volatile week that saw the US threaten to impose new 10% tariffs on an additional US$200 billion in Chinese imports, and saw the yuan depreciate for a fifth straight week.

China's second quarter economic growth due at the start of next week should provide a clearer indication of how the world's second-biggest economy performed.

The dollar index, which tracks the greenback against a basket of six major rivals, was firmer in Asian trade and has been benefiting all week from a flight to safety as investors fret over trade conflict concerns.

Singapore's dollar was little changed at 1.364. Data out earlier in the morning showed that economic growth missed forecasts as worsening US-China trade tensions clouded the outlook for the trade-reliant city-state.    

The South Korean won, a currency that is sensitive to trade developments out of China, gained 0.2% to 1,124.1 per dollar.

On Thursday, the won slid as much as 0.9% after the country's central bank kept rates unchanged as expected, but a dissenting vote on the seven-member board appeared to raise the chance of a rate hike in the coming months.

"The won will be the go-to trade on the escalation of trade war tensions, but in the meantime, the RMB complex will continue to dictate the pace of play," said Stephen Innes, head of trading APAC at Oanda.

INDIA'S RUPEE GAINS

The region's worst performer this year, the Indian rupee, strengthened 0.2% to 68.42 to the dollar, marking an end to a week which saw oil prices ease as well as weaker-than-expected inflation growth.

Annual consumer prices rose 5% in June, a five-month high, bolstering the chance the central bank will again raise interest rates at its next policy meeting in August.

"Upside risks to inflation and a need to maintain financial markets' stability will keep monetary policy on a tightening bias," wrote Radhika Rao, an economist with DBS.

tmonth in which inflation was higher than the Reserve Bank of India's medium-term target of 4%.

For a country that imports about 80% of its crude oil requirements, a heavy fall in oil prices helped support the rupee's weekly gain.

CURRENCIES VS US DOLLAR
Change on the day at 0533 GMT

Currency                     Latest bid  Previous day  % move
Japan yen                    112.620     112.55        -0.06
Sing dlr                     1.364       1.3630        -0.05
Taiwan dlr                   30.525      30.542        +0.06
Korean won                   1124.100    1125.9        +0.16
Baht                         33.240      33.26         +0.06
Peso                         53.500      53.393        -0.20
Rupiah                       14375.000   14375         +0.00
Rupee                        68.420      68.57         +0.22
Ringgit                      4.038       4.0395        +0.04
Yuan                         6.672       6.6730        +0.01

Change so far in 2018

Currency                     Latest bid  End 2017      % move
Japan yen                    112.620     112.67        +0.04
Sing dlr                     1.364       1.3373        -1.94
Taiwan dlr                   30.525      29.848        -2.22
Korean won                   1124.100    1070.50       -4.77
Baht                         33.240      32.58         -1.99
Peso                         53.500      49.977        -6.59
Rupiah                       14375.000   13565         -5.63
Rupee                        68.420      63.87         -6.65
Ringgit                      4.038       4.0440        +0.15
Yuan                         6.672       6.5069        -2.48