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EM ASIA FX-S.Korea's won stumbles, trade war doubts weigh on region

Published 11/01/2019, 03:20 PM
Updated 11/01/2019, 03:24 PM
© Reuters.  EM ASIA FX-S.Korea's won stumbles, trade war doubts weigh on region
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* S.Korean won slips 0.6%, Oct exports fall most in 4 years
* Malaysia cenbank to hold key interest rate next week -
poll
* Chinese yuan set to gain for 4th straight week

(Adds text, updates prices)
By Niyati Shetty
Nov 1 (Reuters) - South Korea's won eased in subdued trade
on Friday, as fresh uncertainties over a Sino-U.S. trade deal
weighed on regional currencies amid more evidence of a slowdown
in manufacturing.
Factory activity in Asia shrank further in October on
cooling global demand, highlighting the broadening pain the
Sino-U.S. trade war is inflicting on manufacturers. "The broader picture is still one of doubts over the
potential bottoming of the Asian cycle," said Chang Wei Liang,
macro strategist (FX and credit) at DBS Bank. "Markets are
taking a bit of a breather in the meanwhile to assess the
incoming data."
The won KRW=KFTC weakened as much as 0.6% to 1,170.90 per
dollar, marking its worst trading session in three weeks, but
was on track to firm for a fifth straight week.
South Korea's manufacturing activity contracted for a sixth
straight month in October but at a slightly slower pace, a
private survey showed on Friday. Also weighing on the currency, South Korea's exports fell
for an 11th straight month in October and by the most in nearly
four years as shipments to China kept slowing and computer chip
prices plunged, government data showed. The Indonesian rupiah IDR= slipped after a private survey
showed the country's factory activity in October contracted
further, with a purchasing manager's index hitting a four-year
low. The Indian rupee INR=IN and the Taiwan dollar TWD=TP
were little changed, while the Singapore dollar SGD= and the
Thai baht THB=TH inched up.
The Malaysian ringgit MYR= added 0.2% as factory activity
hit a six-month high, but was still in contraction territory.
The country's central bank is expected to keep its benchmark
interest rate unchanged at a policy review next week, according
to a Reuters poll, saving its policy ammunition in case global
growth falters next year. The Philippine financial market was closed for a holiday. In
offshore trade, the peso PHP= firmed 0.3%.

TRADE DEAL DOUBTS
The Chinese yuan CNY=CFXS weakened marginally to 7.043 per
dollar due to renewed uncertainty over whether Beijing and
Washington can reach a deal to end their protracted trade war.
Optimism was dampened by a Bloomberg report on Thursday
which cited unnamed sources as saying Chinese officials have
doubts about whether a comprehensive long-term deal is possible
between Beijing and Washington. However, declines in the currency were curbed after a
private business survey on Friday showed China's factory
activity unexpectedly expanded at the fastest pace in well over
two years in October. Onshore yuan is set for a fourth consecutive week of gains.


The following table shows rates for Asian currencies against
the dollar at 0612 GMT.
CURRENCIES VS U.S. DOLLAR

Currency Latest bid Previous day Pct Move
Japan yen 107.980 108.02 +0.04
Sing dlr 1.358 1.3602 +0.17
Taiwan dlr 30.468 30.462 -0.02
Korean won 1166.600 1163.4 -0.27
Baht 30.160 30.18 +0.07
Peso 50.630 50.76 +0.26
Rupiah 14050.000 14032 -0.13
Rupee 70.910 70.92 +0.01
Ringgit 4.170 4.1775 +0.18
Yuan 7.043 7.0401 -0.05

Change so far in 2019
Currency Latest bid End 2018 Pct Move
Japan yen 107.980 109.56 +1.46
Sing dlr 1.358 1.3627 +0.35
Taiwan dlr 30.468 30.733 +0.87
Korean won 1166.600 1115.70 -4.36
Baht 30.160 32.55 +7.92
Peso 50.630 52.47 +3.63
Rupiah 14050.000 14375 +2.31
Rupee 70.910 69.77 -1.61
Ringgit 4.170 4.1300 -0.96
Yuan 7.043 6.8730 -2.42


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