* Yuan marginally eases despite c.bank’s steady fix
* Indonesia c.bank expected to cut rates on Thursday
* Foreign banks buy rupiah, local lenders sell
* Won, ringgit up on position adjustments
(Adds text, updates prices)
By Jongwoo Cheon
SINGAPORE, Jan 13 (Reuters) – Emerging Asian currencies rose
on Wednesday thanks to China’s stronger-than-expected December
trade data and persistent efforts to calm the yuan, even as
traders and analysts expected the renminbi to weaken over the
long term.
China’s yuan eased although the central bank kept
its daily guidance rate steady again in a bid to stop
the currency’s slide.
“It is too early to expect yuan stability now. The stability
we are seeing now is purely due to intervention. Depreciation
pressure remains,” said Nordea Markets’ senior analyst Amy Yuan
Zhuang in Singapore.
The People’s Bank of China used state banks to drive implied
overnight yuan interest rates above 90 percent in Hong Kong on
Tuesday, showing resolve to stop the yuan from tumbling, and
making it prohibitively expensive to speculate against the yuan
offshore.
“These measures, if continued, could be seen as a setback in
financial liberalisation and not good in the long term,” Zhuang
said, referring to China’s stabilisation steps.
Once the renminbi resumes its depreciation, the South Korean
won, the Singapore dollar and the Taiwan
dollar will face large downside, while other emerging
Asian currencies will probably muddle through, she added.
The won and the Malaysian ringgit advanced on
Wednesday as investors covered short positions in the two
worst-performing regional units so far this year on data showing
China’s exports and imports shrank much less than expected.
RUPIAH
Indonesia’s rupiah gained on higher government bond
prices amid expectations that the central bank may cut its
policy interest rate on Thursday.
The rupiah advanced on buying by foreign banks, with most
Indonesian government bond prices, especially
long-term debts, higher.
Still, local banks sold the currency on expectations of a
central bank rate cut.
Bank Indonesia is predicted to slash its benchmark borrowing
cost by 25 basis points to 7.25 percent, a Reuters poll
showed.
A rate cut could spur a knee-jerk selling of Indonesian
bonds and currency, traders and analysts said. Falling inflation
and a shrinking current account deficit have recently helped
foreign investors seek higher yields in the country.
A Jakarta-based currency trader said the rupiah could weaken
to 14,000 per dollar if the central bank slashes rates.
WON
The won rose as traders cut bearish bets in the
worst-performing Asian currency so far this year.
Traders doubted the South Korean currency could extend
gains, saying risk sentiment stayed fragile.
“Offshore funds’ dollar demand was still there. Without
other bearish factors such as oil prices turning around, the won
is unlikely to change its direction,” said a foreign bank trader
in Seoul.
Oil fell briefly below the widely watched $ 30-per-barrel
level on Tuesday for the first time in 12 years, although they
rebounded on Wednesday in Asia.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0520 GMT
Currency Latest bid Previous day Pct Move
Japan yen 118.23 117.63 -0.51
Sing dlr 1.4341 1.4383 +0.29
Taiwan dlr 33.402 33.667 +0.79
Korean won 1204.16 1210.30 +0.51
Baht 36.24 36.32 +0.22
Peso 47.53 47.44 -0.18
Rupiah 13845.00 13905.00 +0.43
Rupee 66.75 66.86 +0.16
Ringgit 4.3845 4.4090 +0.56
Yuan 6.5790 6.5756 -0.05
Change so far in 2016
Currency Latest bid End prev year Pct Move
Japan yen 118.23 120.30 +1.75
Sing dlr 1.4341 1.4177 -1.14
Taiwan dlr 33.402 33.066 -1.01
Korean won 1204.16 1172.50 -2.63
Baht 36.24 36.00 -0.66
Peso 47.53 47.06 -0.98
Rupiah 13845.00 13785.00 -0.43
Rupee 66.75 66.15 -0.90
Ringgit 4.3845 4.2935 -2.08
Yuan 6.5790 6.4936 -1.30
(Additional reporting by Yena Park in SEOUL; Editing by Biju
Dwarakanath)
