Most Asian currencies edged higher on Tuesday with the Chinese yuan firming the most after reopening from a week long holiday while investors held positions ahead of the high level Sino-US trade talks on Thursday and Friday.
Prospects for progress in US-China trade talks dimmed on Monday after Washington blacklisted Chinese companies but comments by US President Donald Trump and his top economic adviser, Larry Kudlow on looming trade talks were generally upbeat.
“We think there’s a chance we could do something very substantial,” Trump said about the talks.
This comes after a media report stated that China is looking to narrow the scope of the talks.
“China is realistic and would only target issues that both countries have agreed on this week,” a DBS note said. However, sentiment seemed buoyed on hopes of a partial deal despite Washington’s move to blacklist Chinese companies.
The Chinese yuan reopened after a week long holiday to strengthen 0.3 percent.
“Hopes have emerged on trade talks, inspired by reports that Beijing is preparing to work through tough negotiations with the US, setting a time-line for the thorny issues,” Vishnu Varathan, senior economist at Mizuho Bank said in a note.
The Philippine peso firmed 0.3 percent against the dollar, clawing back some of the losses from the previous session. The peso had weakened 0.4 percent on Monday amid caution ahead of the trade talks.
The Taiwan dollar strengthened 0.3 percent. Data showed that the island’s equity markets received about $2.9 billion of foreign investment in September, on optimism over its economy, as a growing number of local firms were shifting their factories to Taiwan from mainland China.
The South Korean won firmed 0.2 percent after better than expected third quarter forecast from the world’s biggest semiconductor firm, Samsung Electronics, reduced concerns over South Korea’s exports.
Meanwhile, the Thai Baht bucked the trend to weaken about 0.1 percent. The baht has shown resilience by strengthening by the most among Asian units so far this year.
Indian financial markets were closed for a holiday. – Reuters