EM ASIA FX-Asian currencies climb as dollar drops on lower yields

(Adds text, updates prices)
By Patturaja Murugaboopathy
June 3 (Reuters) - Asian currencies climbed on Monday as the
dollar weakened due to a sharp fall in U.S. yields, and fears
that U.S. President Donald Trump's aggressive trade diplomacy
could tip the United States and other major economies into
recession.
Surveys released on Monday showed factory activity
contracted in most Asian countries last month as an escalating
trade war between Washington and Beijing raised fears of a
global economic downturn and heaped pressure on policymakers in
the region and beyond to roll out more stimulus. The dollar index .DXY , which measures the greenback
against a basket of six major peers, fell 0.16% after benchmark
10-year U.S. Treasury yields US10YT=RR fell as low as 2.121%
early on Monday, their lowest since September 2017.
"The extension of trade tensions beyond China towards the
likes of Mexico and also India by the Trump administration
appears to have diminished the safe haven appeal of the
greenback," said Jingyi Pan, a Singapore-based market strategist
with financial services firm IG.
"This had seen to the US dollar declining against major
currencies and likewise for USD/Asians."
Already on edge over Sino-U.S. trade tensions, financial
markets have been further unnerved by Trump's threat to levy
punitive tariffs on all Mexican goods unless Mexico, the United
States second biggest trade partner, did more to staunch the
flow of migrants from Central America.
"True that market typically buys the dollar on fears of no
trade deal, etc. But trade tensions can also hurt US growth,
jobs creation and financial markets," said Saktiandi Supaat,
head of FX research at Maybank in a report.
The South Korean won KRW=KFTC climbed about 1% against the
dollar, leading the regional gainers on the day, despite dismal
export data released on Saturday. Seen as a bellwether of world
growth, South Korean exports fell 9.4% in May, worse than a
median forecast for a 5.6% decline.
The Indian rupee INR=IN also rose about half a percent,
despite data showing its the economy grew at its slowest pace in
more than four years in January-March period. MUFG Bank said in a report that the sharp deceleration in
India's real GDP growth in the first quarter, made a 25 basis
points cut in the central bank's policy repo rate more likely
this week, regardless of potential upside risks to inflation.
The Malaysian ringgit MYR= rose 0.2% on the day, helped by
its exports rising unexpectedly in April after two consecutive
months of decline. China's yuan inched up against the U.S. dollar as the
central bank set a firmer midpoint to warn off speculators after
Sino-U.S. trade rhetoric heated up over the weekend.
A policy paper published by the Chinese government on Sunday
said that latest U.S. tariffs on Chinese imports will not
resolve the two countries' trade issues, and the United States
bears responsibility for setbacks in the talks process.
In May, the yuan declined 2.45% against the dollar, its
worst monthly performance in 10 months.
Thai and Indonesian currency markets were closed for local
holidays.
The following table shows rates for Asian currencies against
the dollar at 0544 GMT.
CURRENCIES VS U.S. DOLLAR
CURRENCIES VS U.S.
DOLLAR
Change on the day at
0544 GMT
Currency Latest Previous Pct
bid day Move
Japan yen 108.180 108.26 +0.07
Sing dlr 1.371 1.3734 +0.20
Taiwan dlr 31.473 31.612 +0.44
Korean won 1180.00 1190.9 +0.92
0
Peso 51.980 52.09 +0.21
Rupee 69.445 69.68 +0.33
Ringgit 4.179 4.189 +0.24
Yuan 6.903 6.9040 +0.02
Thai and Indonesian
markets are closed
for holidays
Change so far in
2019
Currency Latest End 2018 Pct
bid Move
Japan yen 108.180 109.56 +1.28
Sing dlr 1.371 1.3627 -0.58
Taiwan dlr 31.473 30.733 -2.35
Korean won 1180.00 1115.70 -5.45
0
Baht 31.670 32.55 +2.78
Peso 51.980 52.47 +0.94
Rupiah 14270.0 14375 +0.74
00
Rupee 69.445 69.77 +0.47
Ringgit 4.179 4.1300 -1.17
Yuan 6.903 6.8730 -0.43