* South Korean won firms to near 4-mth high
* Room for South Korean cenbank to cut rates - official
* Yuan set for its strongest month since January
(Adds text, updates prices)
By Niyati Shetty
Oct 31 (Reuters) - Asian currencies strengthened against the
dollar on Thursday, with South Korea's won leading the pack,
after the U.S. Federal Reserve cut interest rates for a third
time this year.
The dollar .DXY weakened against a basket of major
currencies after the U.S. central bank lowered its policy rate
by 25 basis to sustain growth in the world's largest economy,
but signalled a potential pause in the easing cycle.
"Lower Fed rates make it easier for Asian central banks to
follow suit and prop up domestic economies here," ING said in a
note.
Adding that while the signalled "pause" could be viewed as a
negative sign, Wednesday's Fed cut might not be the last this
cycle as rising global risks could hurt the country's growth
prospects.
The won KRW=KFTC , Asia's worst performing currency so far
this year, rose by up to 0.7% to its strongest in nearly four
months. The currency was set to record its best month since
June.
Earlier in the day, Bank of Korea's senior deputy governor
said the latest policy decision and comments by the Fed means
there is room for the South Korean central bank to cut its
policy interest rate if needed. Market sentiment is in favour of risk taking and the Korean
won is performing well since it is always seen as the currency
that captures the mood in Asian forex markets, said Irene
Cheung, senior strategist for Asia at ANZ Banking Group
(Singapore).
The Taiwan dollar TWD=TP and the Philippine peso PHP=
each added 0.2%.
The Singapore dollar SGD= , Thai baht THB=TH , Malaysian
ringgit MYR= and Indian rupee INR=IN were marginally
stronger.
YUAN FIRMS DESPITE WEAK DATA
The yuan CNY=CFXS added as much as 0.3% to its strongest
in more than 2 months, propped up by a weaker greenback. CNY/
However, gains were tempered as official data showed factory
activity in China shrank for the sixth straight month in October
and by more than expected, pointing to further pressure on the
country's manufacturers from a trade war with the United States.
China's central bank on Thursday also skipped its targeted
medium-term lending facility operations for the first time since
their debut in January, prompting some market concern that
Beijing may have become less aggressive about monetary easing.
The currency was on track to record its best month since
January.
The following table shows rates for Asian currencies against
the dollar at 0632 GMT.
CURRENCIES VS U.S. DOLLAR
Currency Latest bid Previous day Pct Move
Japan yen 108.680 108.83 +0.14
Sing dlr 1.360 1.3616 +0.10
Taiwan dlr 30.475 30.533 +0.19
Korean won 1163.400 1168.1 +0.40
Baht 30.180 30.22 +0.13
Peso 50.740 50.86 +0.24
Rupiah 14013.000 14022 +0.06
Rupee 70.798 70.88 +0.12
Ringgit 4.175 4.1785 +0.08
Yuan 7.042 7.0560 +0.20
Change so far in 2019
Currency Latest bid End 2018 Pct Move
Japan yen 108.680 109.56 +0.81
Sing dlr 1.360 1.3627 +0.18
Taiwan dlr 30.475 30.733 +0.85
Korean won 1163.400 1115.70 -4.10
Baht 30.180 32.55 +7.85
Peso 50.740 52.47 +3.41
Rupiah 14013.000 14375 +2.58
Rupee 70.798 69.77 -1.45
Ringgit 4.175 4.1300 -1.08
Yuan 7.042 6.8730 -2.40