Asian FX rises

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    Most emerging Asian currencies rose on Thursday, led by the Korean won after Washington and Beijing formally agreed to resume trade talks in October, giving a fillip to investor sentiment.

    The United States and China said they would hold high-level trade talks in early October, in announcements that helped ease more immediate recession fears and gave Asian assets early gains.

    The Chinese onshore yuan rose as much as 0.3 percent after news of the trade talks surfaced, but later pared gains to settle 0.2 percent higher at 7.133 against the dollar.

    The Korean won, which is particularly sensitive to trade tensions owing to the nation’s large reliance on exports, added 0.8 percent and was the session’s top performer.

    The Taiwan dollar, which is also sensitive to international trade developments, rose 0.3 percent.

    Sentiment in risk asset markets was also bolstered by apparent breakthroughs in the political standoffs in Hong Kong and Britain. In the UK, a parliamentary vote put on hold a no-deal Brexit while Hong Kong withdrew the contentious extradition bill that sparked recent protests.

    The Malaysian ringgit rose 0.3 percent, adding to the previous session’s gains after an unexpected jump in the country’s exports.

    The Indian rupee firmed against the dollar for a second straight session after Tuesday’s major sell-off.

    While there is a prevailing sense of investor relief, analysts believe there are still reasons to remain cautious.

    “Despite the gains in riskier assets, global investors are not getting carried away by this surge in optimism, having been seasoned by the tumultuous developments surrounding the year-long US-China trade conflict,” said Han Tan, market analyst at brokerage FXTM in a note.

    For risk sentiment to improve, markets will need more substantial evidence that China and the United States are closer do drawing a trade deal while the possibility of a no-deal Brexit would also have to be snuffed out almost entirely, he added. – Reuters

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