Most Asian currencies rise as dollar slips; trade signals mixed

By Shreya Mariam Job

(Reuters) – Most Asian currencies firmed on Thursday, as a volatile dollar weakened broadly on mixed signals over the state of trade talks between Washington and Beijing.

Dampened sentiment following suggestions that the Chinese delegation might cut the ministerial-level talks short and leave Washington on Thursday were offset by a Bloomberg report that the United States is weighing a currency pact with China as part of a partial deal.

Traders also took note of a New York Times report that Washington will issue licenses allowing some U.S. companies to supply non-sensitive goods to China’s Huawei, as the dollar eased against a basket of major currencies <.DXY>. [FRX/]

“News of Huawei and the currency pact released together with the strong (yuan) fix, underscores the fact that PBoC (People’s Bank Of China) is (ready) …to give a strong guidance for the CNY as a potential pact with the U.S. could be at hand,” a Maybank note said.

U.S. Federal Reserve meeting minutes released on Wednesday were largely in line with expectations and had little market impact.

The yuan strengthened 0.3% and the Singapore dollar firmed 0.2%.

The Philippine peso firmed marginally. Data showed that August exports rose 0.6%, while imports slumped 11.8%, narrowing the country’s August deficit.

Taiwan financial markets were closed for a holiday.

WON SLIPS

The Korean won bucked the trend to slip 0.3% ahead of talks with Japan on Friday over tighter export controls from Tokyo. The talks are part of a dispute settlement process through the World Trade Organisation.

The won is the worst performer among Asian currencies this year.

The prolonged Sino-U.S. trade conflict and the dispute with Japan has dealt a huge blow to South Korea’s trade-reliant economy. In September, exports slumped 11.7%, shrinking for the 10th consecutive month.

(Reporting by Shreya Mariam Job in Bengaluru; editing by John Stonestreet)