Most Asian currencies weaken

Most Asian currencies weakened on Thursday as the US dollar firmed, boosted by solid US data though its gains were capped by doubts over the prospects for US tax reform. Data out on Wednesday showed that US underlying consumer prices rose in October, supporting the idea that a recent disinflationary trend that had worried the Federal Reserve had ended. There was also an unexpected rise in retail sales last month.
"Taken together these data (inflation and retail sales) suggest there is little to sway the US Fed from a December hike and further hikes across the course of 2018. That's part of the reason the US dollar - which fell to around 93.40 in DXY terms before recovering to 93.77 - found a bid and rallied," said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.
But dollar strength was limited by uncertainity over a Senate Republican tax plan that drew fire from two Republican lawmakers on Wednesday in what could be a sign of trouble for the sweeping measure. The Chinese yuan led the losses among the regional currencies as it weakened more than 25 basis points. The People's Bank of China will inject 330 billion yuan ($49.85 billion) into money markets on Thursday, traders said.
The yuan is expected to trade in a range of 6.50-6.70 in the weeks ahead. The PBOC's liquidity injection was aimed at avoiding risks arising from a selloff in bonds, Scotiabank said in a note. China's Ministry of Finance on Wednesday auctioned 32 billion yuan ($4.82 billion) of seven-year bonds at an average yield of 3.9644 percent, traders said, below market expectations. The Indian rupee fell 0.2 percent, while the Malaysian ringgit, Indonesian rupiah and Singapore dollar all weakened marginally.
Bucking the trend, the Korean won firmed 0.6 percent to its highest since October 2016, in tandem with the KOSPI stock index which rose almost half a percent. Foreign currency deposits in South Korean banks at end-October rose briskly from September, posting the biggest-ever monthly jump as exporters lifted their dollar holdings, the Bank of Korea said on Thursday.
The country's exports boom continued last month, marking 12 consecutive months of growth, propelled by soaring sales of memory chips, the trade ministry said earlier this month. The Philippine peso strengthened 0.3 percent as the country's economy clocked solid growth in the third quarter, topping forecasts and expanding at its fastest pace in a year, the statistics agency said on Thursday.
Gross domestic product rose 6.9 percent in the third quarter from a year earlier, supported by strong industrial output and services. The Philippines is benefiting from the steady rebound in exports, which were up 12.2 percent in the nine months to September.