March 22, 2018, 4:09 am
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Yuan other EM currencies rise

SINGAPORE- The Chinese yuan and other emerging Asian currencies edged higher on Tuesday as the dollar pulled back, with investors awaiting a news conference by US President-elect Donald Trump later this week for further clues on policy and the direction of the greeback.

The South Korean won  about 1 percent, while the Indonesian rupiah  touched its highest level in nearly a month at one point and was last up 0.4 percent on the day.

The dollar retreated against a basket of six major currencies, with the dollar index  slipping 0.3 percent.

The pullback in the dollar is probably due to position squaring, said Stephen Innes, senior trader for FX broker OANDA in Singapore.

“What I’m starting to see evolve early in 2017 are little short bursts of market momentum, followed up by quick profit-taking,” Innes said.

One focus is whether Trump will provide any further details on his fiscal policy proposals at a news conference on Wednesday, Innes added. 

The dollar will probably see some range-trading against Asian currencies before Trump takes office on Jan. 20, said Christopher Wong, senior FX strategist for Maybank.

Traders will also be keeping an eye on comments from Fed Chair Janet Yellen, who is due to speak on Thursday, Wong added.

Yellen is due to give brief opening remarks and to take part in a webcast town-hall meeting with educators on Jan. 12. 

Asian currencies have retreated broadly over the past couple of months as US bond yields jumped on expectations that Trump’s proposals for infrastructure spending and tax cuts will prop up US economic growth and inflation.Such rises in US yields can reduce the attractiveness of investing in emerging market assets and spur capital outflows from such markets.

Meanwhile, sterling steadied somewhat in Asian trade after weekend comments from British Prime Minister Theresa May sent it skidding to 2-1/2-month lows, while the dollar wallowed well below recent highs as the perceived safe-haven yen gained.

The pound edged up 0.1 percent to $1.2162 , after sinking as low as $1.2125 on Monday, its weakest since Oct. 28, following May’s statement that she was not interested in keeping “bits of membership” of the European Union.

“Fears of a ‘hard Brexit’ have increased, and this has made investors more risk-averse,” said Kumiko Ishikawa, FX market analyst at Sony Financial Holdings.  - Reuters
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