EM ASIA FX-Asian currencies firmer as Trump policy worries dent dollar
Singapore (Jan 31) Most Asian currencies rose on Tuesday against a wobbly dollar as U.S. President Donald Trump's tough stance on immigration stirred worries about his policy priorities and risks to the U.S. economic outlook.
The Thai baht touched its highest level since Nov. 10 at around 35.16 per dollar, helped by local exporters' dollar-selling at the month-end. A few other currencies, including the Philippine peso and the Singapore dollar , gained 0.1 percent against the greenback.
Onshore trading in the Chinese yuan and the Taiwan dollar remained closed on Tuesday, for the Lunar New Year holidays.
The latest blow against the dollar came after Trump on Friday ordered a temporary ban on the entry of refugees and people from seven Muslim-majority countries. The immigration curbs stirred worries about Trump's inward-looking policies and possible risks to the economic outlook, and weighed on the greenback.
"When you take into account all the aspects of his actions, it's hard to buy the dollar wholeheartedly," said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore.
"There is just a lot of uncertainty, which makes it difficult to decide on a (trading) strategy," he added.
Trump fired top federal government lawyer Sally Yates on Monday after she took the extraordinarily rare step of defying the White House and refused to defend new travel restrictions targeting seven Muslim-majority nations. Against a basket of six major currencies, the dollar last traded at 100.40 , down from a one-week high of 101.02 that was set on Monday.
"The market is very much tethered to movement in the broader U.S. dollar. We may be entering some very important times as the markets are digging for clues on the Trump policy front," Stephen Innes, senior trader at FX broker OANDA, said in a note.
In addition to Trump's policies and remarks, the near-term focus for investors is the U.S. Federal Reserve's two-day policy meeting that starts later on Tuesday.
While the Fed is widely expected to keep the federal funds rate unchanged at a range of 0.50 percent to 0.75 percent this week, investors will be watching for any changes in the Fed's assessment of economic conditions.
Most Asian currencies are on track for monthly gains in January, having enjoyed a lift as investors pared back their bullish bets on the dollar amid worries that Trump was focusing more on trade protectionism than pro-growth policies.
CURRENCIES VS U.S. DOLLAR Change on the day at 0436 GMT Currency Latest bid Previous Pct
day Move Japan yen 113.55 113.80 +0.22 Sing dlr 1.4192 1.4206 +0.10 Taiwan dlr* 31.360 31.360 +0.00 Korean won 1163.89 1159.20 -0.40 Baht 35.19 35.27 +0.24 Peso 49.760 49.820 +0.12 Rupiah 13336 13340 +0.03 Rupee 67.87 67.95 +0.12 Ringgit 4.4270 4.4300 +0.07 Yuan* 6.8807 6.8807 +0.00
Change so far in 2017 Currency Latest bid End prev Pct
year Move Japan yen 113.55 117.07 +3.10 Sing dlr 1.4192 1.4490 +2.10 Taiwan dlr 31.330 32.279 +3.03 Korean won 1163.89 1207.70 +3.76 Baht 35.19 35.80 +1.76 Peso 49.76 49.72 -0.08 Rupiah 13336 13470 +1.00 Rupee 67.87 67.92 +0.07 Ringgit 4.4270 4.4845 +1.30 Yuan 6.8807 6.9467 +0.96
* Taiwan's financial markets are closed from Jan. 27 to Feb. 1. * Chinese financial markets will be closed from Jan. 27 to Feb. 2 for the Lunar New Year holiday.
Source: Reuters
