Asian FX up


    Most Asian currencies clocked slight gains against the greenback on Thursday after the United States and China signed an initial trade deal, though risk appetite was subdued as a number of contentious issues remained unresolved.

    The Chinese yuan rose 0.13 percent to 6.881 per dollar. The currency has gained about 2 percent since December.

    The deal signed by US President Donald Trump and Chinese Vice Premier Liu He on Wednesday will see China boost purchases of US products in exchange for a roll back of some tariffs, but does not address several structural differences that led to the conflict.

    “Lot of the optimism on this (trade) front has already been priced in,” analysts at DBS Bank said in a note.

    The Philippine peso added 0.2 percent, while the Taiwan dollar and the Malaysian ringgit edged up.

    The South Korea won retreated 0.2 percent ahead of Bank of Korea’s (BoK) policy meeting due on Friday.

    A Reuters poll showed that the central bank is likely to keep rates on hold at 1.25 percent due to signs of economic recovery, though any further uncertainties in its growth outlook could result in rate cuts again this year.

    “Pressure for the BoK to cut rates to support growth has been reduced recently, thanks to the stabilization in external trade conditions and the pickup in domestic demand,” DBS said.

    The Indonesian rupiah was firmed as much as 0.3 percent to its strongest level since February 2018.

    The central bank on Thursday said a stronger rupiah will not harm exporters, refuting concerns raised by Indonesia’s President Joko Widodo earlier in the day that exporters may be upset if the currency strengthens too quickly against the dollar.

    Bank Indonesia’s deputy governor reaffirmed that the rupiah was strengthening on improving fundamentals and added that the central bank did not see a need to intervene.

    The rupiah has gained 1.7 percent so far this year, making it the best performing currency in the region. – Reuters