Asia FX retreats

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    Most Asian currencies retreated on Tuesday as uncertainty over a Sino-US trade deal kept risk-driven plays at bay, but they traded in tight ranges ahead of US Federal Reserve and European Central Bank events later this week.

    Minutes of the Federal Open Market Committee’s October meeting are due to be released on Wednesday, while markets are also awaiting the first major speech by ECB President Christine Lagarde on Friday.

    Before that, US October housing starts data could provide insight on consumer spending strength in the world’s largest economy. The reading is expected to have risen from the prior month, according to a Reuters poll.

    “Overall, risk-related plays will continue to be whipsawed by alternating headlines, but in the short term, risk-off plays may still have room to run as uncertainties persist,” OCBC’s Terence Wu said in a research note.

    “The lead-in for the Asian currencies is slightly negative today, thus, expect USD/Asia to edge higher on an intraday basis.”

    The Singapore dollar fell slightly, with third-quarter GDP data expected on Thursday. A Reuters poll expects a strong reading, thanks to a recovery in manufacturing.

    Singapore’s exports have suffered a sustained decline due to ructions in global trade caused by the Sino-US tariff war.

    The Indonesian rupiah declined about 0.1 percent to the dollar. The country’s central bank is widely expected to leave its benchmark interest rate unchanged on Thursday, after cutting rates for four straight months.

    Southeast Asia’s largest economy swung to a trade surplus in October, thanks to a lower-than-expected drop in exports, as well as a decline in imports.

    The South Korean won led regional losses with a 0.36 percent decline, while the Chinese yuan was largely flat after a stronger-than-expected midpoint fix.

    Bucking the trend, the Thai baht rose about 0.17 percent, despite the country recording slower-than-expected third quarter economic growth on Monday.

    The strength of the baht is a concern, and the export-reliant economy is expected to lag the central bank’s growth forecast for this year, the Bank of Thailand’s governor said on Monday.

    The currency is the best performer among its peers this year, having gained more than 7.8 percent so far. – Reuters