Most currencies weaker at start of data-heavy week

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(July 2): Most Asian currencies weakened on Monday, as investors braced for a week packed with economic data that could set the tone for the region's economies and markets at a time of widespread uncertainty and persistent trade tensions. 

The People's Bank of China strengthened the yuan's official midpoint fixing to 6.6157 to the dollar, after eight consecutive weaker fixings.

Trade tensions have already hammered the yuan which registered its worst month on record in June and was trading 0.4% lower on Monday. 
  
A private survey on Monday showed that growth in China's manufacturing sector cooled slightly in June.

The Caixin/Markit Manufacturing Purchasing Managers' index showed new export orders contracted for the third straight month and the most in two years, though there was no significant slide from the previous two months. 

The survey followed government data issued at the weekend showing growth in China's manufacturing sector slowed in June, after a better-than-expected performance in May.

The yuan could face another challenge on July 6, when the United States is due to impose tariffs on US$34 billion worth of Chinese goods. Beijing is expected to respond with tariffs of its own on U.S. goods.

"While the tariffs have yet to kick in and show up in actual export numbers, trade war tremors have triggered mini-quakes in China's manufacturing PMI," Mizuho Bank said in a note. 

"If trade salvos escalate into a full-blown war, adverse and abrupt repercussions for wider EM Asia (via supply-chain linkages)...will be disproportionate."

The Indonesian rupiah slipped 0.5%, the most among the regional currencies, while the export-dependent Singapore dollar and South Korean won weakened 0.3% and 0.5% respectively. 

The won's fall was in line with Seoul's KOSPI stock index which dipped 1.9% on political risks seen in the European Union and concerns over China's economic growth.

The Indian rupee, the region's worst-performing currency in 2018, weakened 0.3% while close second the Philippine peso traded 0.1% lower.

Indonesian rupiah

The rupiah slid on Monday after the statistics bureau said annual inflation rate slowed less than expected in June from a year ago, and stayed within Bank Indonesia's target range.

June's annual inflation rate came in at 3.12%, compared with May's 3.23%. 

Indonesia's central bank had hiked its policy interest rate by 50 basis points, twice what the market expected, as it stepped up efforts to stabilise the volatile rupiah.
    
Thai baht 

The Thai baht was firmer, after trimming some early gains.

Thailand's annual headline consumer price index rose 1.38% in June, compared with a forecast of a 1.54% increase, and against May's 1.49% rise, commerce ministry data showed.

The inflation rate was in line with the ministry's predicated range which has left its policy interest rate unchanged at 1.50%, near record lows, since April 2015.
    
The following table shows rates for Asian currencies against the dollar.

 CURRENCIES VS U.S. DOLLAR
 Change on the day at   0642 GMT

Currency Latest bid Previous day Pct Move
Japan yen 110.720 110.66 -0.05
Sing dlr 1.367 1.3626 -0.29
Taiwan dlr 30.494 30.500 +0.02
Korean won 1120.000 1114.5 -0.49
Baht 33.140 33.15 +0.03
Peso 53.387 53.311 -0.14
Rupiah 14390.000 14325 -0.45
Rupee 68.630 68.47 -0.24
Ringgit 4.038 4.038 +0.00
Yuan 6.646 6.6225 -0.35


                                                        
 Change so far in 2018

Currency Latest bid End 2017 Pct Move
Japan yen 110.720 112.67 +1.76
Sing dlr 1.367 1.3373 -2.14
Taiwan dlr 30.494 29.848 -2.12
Korean won 1120.000 1070.50 -4.42
Baht 33.140 32.58 -1.69
Peso 53.387 49.977 -6.39
Rupiah 14390.000 13565 -5.73
Rupee 68.630 63.87 -6.94
Ringgit 4.038 4.0440 +0.15
Yuan 6.646 6.5069 -2.09