Credit: REUTERS/Thomas WhiteBy Shriya Ramakrishnan
Sept 10 (Reuters) - The Philippine peso weakened on Tuesday following poor trade figures, while most other emerging Asian currencies held tight ranges ahead of the European Central Bank meeting later this week.
A sharp decline in Chinese factory gate prices also subdued appetite for riskier assets as investors remained nervous about the prospects of a global economic slowdown.
Leading declines in the region, the Philippine peso PHP= traded 0.3% lower, following data that showed the Southeast Asian nation's trade deficit widened to $3.39 billion in July from $2.47 billion in the previous month. That has added further pressure to the Philippine economy, which grew at its slowest in 17 quarters in April-June.
"As the trade deficit widens, the twin deficit status (together with fiscal deficit) will add further headwinds on the currency when risk sentiment turns sour," analysts from Mizuho Bank said in a client note referring to the peso.
Bangko Sentral ng Pilipinas Governor Benjamin Diokno has flagged a further quarter-point interest rate reduction before the end of 2019, as it expects prolonged global monetary easing.
In China, factory-gate prices shrank at the sharpest pace in three years in August, data showed on Tuesday, falling deeper into deflationary territory and reinforcing the urgency for Beijing to step up economic stimulus as the trade war with the United States intensifies.
"The data shows the Chinese economy is still trending lower and there could be more rainy days ahead of us, so the risk sentiment is now being suppressed," Margaret Yang Yan, a market analyst at CMC Markets Singapore said.
Currency market focus now turns to the ECB meeting, which is widely expected to introduce a package of stimulus measures and monetary easing on Thursday to boost an ailing regional economy.
The U.S. Federal Reserve is also expected to cut interest rates next week.
Among regional currencies, the Malaysian ringgit MYR=, which resumed trading after a holiday, advanced 0.2% against the greenback and was the top gainer in the region.
The South Korean won KRW=KFTC erased earlier gains to trade 0.1% higher, while China's yuan CNY=CFXS was marginally higher.
The Taiwan dollar TWD=TP edged higher, after data on Monday showed the trade-reliant economy's exports rose unexpectedly in August on strong demand for smartphones.
Financial markets in India were closed for a holiday.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0447 GMT
Currency
Latest bid
Previous day
Pct Move
Japan yen
107.400
107.23
-0.16
Sing dlr
1.381
1.3793
-0.11
Taiwan dlr
31.219
31.250
+0.10
Korean won
1191.300
1193
+0.14
Baht
30.650
30.63
-0.07
Peso
52.000
51.86
-0.27
Rupiah
14025.000
14025
+0.00
Ringgit
4.170
4.178
+0.19
Yuan
7.117
7.1210
+0.06
Change so far in 2019
Currency
Latest bid
End 2018
Pct Move
Japan yen
107.400
109.56
+2.01
Sing dlr
1.381
1.3627
-1.31
Taiwan dlr
31.219
30.733
-1.56
Korean won
1191.300
1115.70
-6.35
Baht
30.650
32.55
+6.20
Peso
52.000
52.47
+0.90
Rupiah
14025.000
14375
+2.50
Rupee
71.700
69.77
-2.69
Ringgit
4.170
4.1300
-0.96
Yuan
7.117
6.8730
-3.43
(Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Sam Holmes)
((Shriya.Ramakrishnan@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
