January 24, 2018, 9:15 am
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Asian FX muted

Most Asian currencies were tepid on Wednesday with the baht staying under pressure ahead of the Bank of Thailand’s policy review where it is expected to keep rates near record lows.

The South Korean won, the Taiwan dollar and the Philippine peso rose in the range of 0.3 percent to 0.1 percent, as the dollar steadied ahead of a vote in Congress to pass the widely anticipated US tax reform bill.

The US House of Representatives initially passed the tax legislation, but the bill included provisions that did not comply with Senate rules. The Senate is expected to vote on a revised version of the bill, with the offending provisions removed. If the Senate approves the bill as expected, the House will vote again on Wednesday.

A spike in US Treasury yields helped the US dollar firm overnight. 

The surge in Treasury yields was driven in part by expectations of tax reforms raising US bond issuance, but many analysts said the immediate trigger was a jump in European bond yields on Tuesday after Germany unveiled a plan to issue more 30-year debt next year. 

The dollar index, which tracks the greenback against a basket of six currencies, was up 0.01 percent at 93.437 by 0500 GMT

“Going forward markets are re-assessing whether or not tax reforms will bolster the economy, but at this junction they are reserved,” said Chang Wei Liang, an FX strategist with Mizuho Bank.

Investors will also be looking to Taiwan’s export orders in November due later on Wednesday. A Reuters poll showed that November orders likely rose for a 16th straight month but at a slower pace than the previous month, a positive sign for the island’s technology manufacturers. – Reuters 
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