Asian FX slips


    Most Asian currencies slipped on Wednesday as investors awaited clarity on whether scheduled US tariffs on Chinese goods will be imposed over the weekend.

    The Wall Street Journal reported on Tuesday that US and Chinese trade negotiators were planning for a delay of tariffs set to be imposed on Dec. 15.

    However, White House economic adviser Larry Kudlow suggested that the tariffs are still on the table and that if negotiations are not to the president’s liking, the tariffs could take effect.

    The South Korean won, which is heavily influenced by trade news, weakened the most among Asian currencies with a 0.2 percent drop and was set to log its third consecutive session of decline.

    The Indonesian rupiah also slipped 0.2 percent, snapping four straight sessions of strength.

    “The primary risk to IDR comes from a larger emerging sell-off if the trade war has to escalate again,” said Mahesh Sethuraman, deputy head of global sales trading at Saxo Capital Markets.

    Meanwhile, investors also await comments from the US Federal Reserve when it hands down its policy decision later in the day, to gauge its future policy stance. The Fed is expected to keep rates on hold at its meeting.

    The Philippine central bank is also expected to keep rates on hold at its policy review on Thursday.

    The Philippine peso slipped 0.1 percent on Wednesday after the government trimmed its medium term growth targets due to rising uncertainties, including the US-China trade war.

    Meanwhile, the Indian rupee firmed for a sixth straight session strengthening 0.2 percent on the back of strong corporate inflows.

    The South Korean won is the worst performer among its Asian peers so far this year, reacting to trade headlines that have heightened risks for the trade-reliant economy.

    Moreover, emerging noise from North Korea that it is running out of patience on a deal with the United States has also raised risks for the Korean economy, Sethuraman said.

    The U.N. Security Council will meet on Wednesday, at the request of the United States, over missile launches by North Korea that could provoke a further escalation in geopolitical tensions.

    Asia’s fourth-largest economy is headed for the worst growth in a decade even after two rate cuts and a big increase in government spending. – Reuters