Asian currencies steady, tax concerns keep dollar under pressure

Reuters: Emerging Asian currencies were mostly steady against the dollar on Wednesday, remaining broadly supported as concerns President Donald Trump’s tax overhaul plan could stall kept pressure on the greenback against its major counterparts.

In China, the yuan see-sawed against the greenback, despite the country’s central bank fixing the midpoint at its highest level in three weeks, amid cautious trade in the currency ahead of key national leadership meeting next week.

The dollar index was slightly weaker, near two-week lows, reflecting uncertainty over Trump’s tax overhaul plan.

Elsewhere in Asia, the Thai baht and the Taiwan dollar strengthened 0.2% and 0.5% against the dollar respectively.

Financial markets in Taiwan resumed operations after a long weekend on Wednesday, with Taiwan stocks ending the session 1% higher.

The Singapore dollar and the Indonesian rupiah  posted very minor gains, while the Korean won  and Peso fell. The peso was the only decliner in the previous session after weaker than expected trade data from Philippines.

In China, traders said authorities are keen to stabilise the yuan with only one week to go until the National Congress of the Communist Party of China.

The spot yuan was 0.02% firmer at 6.5806 at 0621 GMT, after the People’s Bank of China set the official yuan midpoint at 6.5841, its biggest one-day strengthening since early June.

The currency firmed 0.65% against the dollar in the previous session.

The baht was firm for a third straight session on Wednesday, having recorded its biggest%age gain since the end of July in the previous session.

The currency got a fillip on Tuesday after Prime Minister Prayuth Chan-ocha, head of the ruling junta, said Thailand will hold a general election in November 2018, the most precise date he has given yet for the vote since taking power in a 2014 military coup.