February 25, 2018, 6:02 am
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Asia FX up

Asian currencies firmed on Tuesday as last week’s ascent of the US dollar on the back of positive tax reform news stalled.

The dollar index, which measures the greenback against a basket of six major currencies, fell about 0.04 percent to 93.147 at 0647 GMT after gaining about 0.3 percent on Monday.

“Most of the regional currencies already weakened yesterday in anticipation of the passage of the tax package by the Trump administration. Right now the classic seller’s syndrome has hit...which resulted in the dollar giving up some of its gains,” said Manny Cruz, an analyst with Asiasec Equities Inc in Manila.

Strength in Asian currencies was broad-based with most currencies firming against the greenback.

Taiwan’s dollar firmed 0.13 percent on Tuesday ahead of data expected to show inflation at 0.26 percent, according to a Reuters poll of analysts.

The Philippine peso firmed about 0.13 percent as November inflation matched expectations of 3.3 percent. The currency had eased for the previous two trading sessions against the dollar.

India’s rupee was flat ahead of a central bank monetary policy committee meeting due on Wednesday.

Meanwhile, Indonesia’s rupiah and the Singapore dollar firmed 0.06 percent and 0.04 percent, respectively.

The South Korean won firmed 0.27 percent, the most in Asia. Data issued on Tuesday showed South Korea’s foreign exchange reserves edged up to $387.25 billion in November, versus $384.46 billion at the end of October.

A currency trader at a local bank said the won had strengthened because exporters were switching long dollar exposures back to won. He added that he expected the trend to continue further into the week.

The currency is the region’s top performer against the greenback for the year so far, firming 11.23 percent.

CHINESE YUAN

China’s yuan firmed 0.04 percent on Tuesday, shrugging off a weaker midpoint and the launch of a new yuan trading system. 

The official China Foreign Exchange Trade System (CFETS), overseen by the People’s Bank Of China (PBOC), launched a new yuan system of matching orders for USD/CNY trades among market-makers on Monday, in an attempt to improve efficiency. - Reuters
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