EM ASIA FX-China share volatility clouds Asia FX outlook, Singapore dlr up
* SGD firmer than parity vs AUD, hits 6-year high
* Won turns firmer on exporters, offshore funds
* Ringgit near 17-yr low despite S&P; cabinet reshuffle eyed
* Baht turns lower on weak output data, govt cuts GDP f'cast
(Adds text, updates prices)
By Jongwoo Cheon
SINGAPORE, July 28 (Reuters) - The Singapore dollar rose on
Tuesday as volatile Chinese stocks boosted appetite for safer
assets and most emerging Asian currencies gained on the U.S.
dollar's overnight weakness.
South Korea's won outperformed regional peers on
month-end corporate demand, reversing earlier losses.
There were doubts over how long emerging Asian currencies
could hold up, given the mounting concern over China's share
markets after they suffered their largest drop in eight years on
Monday.
In the previous session, the yuan in the offshore
market tumbled, while onshore spot barely moved as
the central bank was seen intervening to support it, traders
said.
Chinese stocks extended their losses by midday on Tuesday as
Beijing scrambled to stabilise them. The wild gyrations have
boosted fears over the financial stability of the world's
second-largest economy.
Such worries came as the Fed is expected to raise interest
rates as soon as September. The U.S. central bank starts its
two-day policy meeting later in the day and investors are
awaiting any clues on the timing of a rate hike.
"Most USD/AXJ are expected to remain supported amid the Fed
tightening bias and weak commodity prices," said Christopher
Wong, a senior currency analyst at Maybank in Singapore,
referring to Asia ex-Japan currencies.
Chinese stocks also slumped, triggering regional equity
sell-down and risk-off sentiment," Wong said. "That will result
in safe-haven flows. Typical safe-haven flows in the yen
and the Singapore dollar will take hold."
Reflecting the downbeat sentiment, commodity currencies like
the Malaysian ringgit and the Indonesian rupiah
did not benefit from the dollar's retreat.
The ringgit stayed around a 17-year low despite Standard &
Poor's affirmation of its sovereign rating, indicating sentiment
remains fragile amid global risk aversion and political
tensions. Local media reported that Prime
Minister Najib Razak, fighting a graft scandal, has dumped his
deputy and four others in a cabinet reshuffle.
Thailand's baht turned weaker after disappointing
June factory output data and as the finance ministry slashed its
economic growth forecast for this year.
SINGAPORE DOLLAR
The Singapore dollar gained versus the greenback as the
currency hit 0.9915 per the Australian dollar, its
strongest since March 2009.
The city-state's unit turned weaker versus the Australian
dollar for the day, but it stayed firmer than parity.
Demand against the neighbouring ringgit also
supported the Singapore dollar.
WON
The won started the day weaker and fell to the session low
of 1,170.6 per dollar on concerns over a rout in China's stocks.
The South Korean currency then steadied as local exporters
bought it for month-end settlements.
Offshore funds also purchased the won at around 1,170 as the
recent decline was viewed as excessive, some analysts said.
The won has lost 4 percent against the dollar so far this
month, putting it on course for its biggest monthly depreciation
since May 2012, Thomson Reuters data showed.
RINGGIT
S&P kept Malaysia's long-term foreign currency sovereign
credit rating at A- with a "stable" outlook, saying allegations
of graft involving debt-laden state fund 1MDB will not impede
policymaking.
The ringgit failed to benefit from the rating affirmation.
It was quoted at 3.8130 per dollar, just a tad stronger than
Monday's low of 3.8176, its weakest since September 1998. The
currency was pegged at 3.8000 from 1998 to 2005.
Most government bond prices fell on Tuesday.
The Malaysian Insider news portal earlier reported that
Deputy Prime Minister Muhyuddin Yassin would be among those
sacked from the cabinet, a day after Najib told Muhyiddin and
others to avoid commenting on the scandal at 1MDB.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0500 GMT
Currency Latest bid Previous day Pct Move
Japan yen 123.52 123.24 -0.23
Sing dlr 1.3652 1.3690 +0.28
Taiwan dlr 31.492 31.560 +0.22
Korean won 1162.30 1167.00 +0.40
Baht 34.87 34.85 -0.06
Peso 45.49 45.56 +0.15
Rupiah 13455.00 13458.00 +0.02
Rupee 64.04 64.16 +0.20
Ringgit 3.8130 3.8150 +0.05
Yuan 6.2095 6.2095 +0.00
Change so far in 2015
Currency Latest bid End prev year Pct Move
Japan yen 123.52 119.66 -3.13
Sing dlr 1.3652 1.3260 -2.87
Taiwan dlr 31.492 31.718 +0.72
Korean won 1162.30 1099.30 -5.42
Baht 34.87 32.90 -5.65
Peso 45.49 44.72 -1.69
Rupiah 13455.00 12380.00 -7.99
Rupee 64.04 63.03 -1.57
Ringgit 3.8130 3.4965 -8.30
Yuan 6.2095 6.2040 -0.09
(Editing by Simon Cameron-Moore)