EM ASIA FX-Asian currencies gain on Sino-U.S. trade truce

(Adds text, updates prices) By Patturaja Murugaboopathy Dec 3 (Reuters) - Most Asian currencies rallied on Monday, as a halt to further tariff escalation between the United States and China lifted investor risk appetites, with the Korean won leading gains. The world's two largest economies agreed in a meeting in Argentina on the weekend to a 90-day truce to their trade war. "The weekend U.S.-China meeting yielded the best outcome that we had hoped for. Although some optimism had been built in the price in the run-up to the meeting, risk assets are still likely to rally further during the early part of this week," said Frances Cheung, head of macro at Westpac. "However, this is better seen as a temporary truce, while structural issues surrounding U.S.-China trade relations have not been resolved yet." The White House said on Saturday President Donald Trump told Chinese President Xi Jinping that he would not boost tariffs on $200 billion of Chinese goods to 25 percent on Jan. 1 as previously announced. Beijing for its part agreed to buy an unspecified but "very substantial" amount of agricultural, energy, industrial and other products. The trade war between the United States and China has battered Asian currencies this year, as most economies in the region depend on export revenues and form a major part of the regional supply chain for Chinese shipments. The South Korean won led regional currencies' gains on the day with a rise of 0.7 percent against the dollar. The won has fallen over 4 percent this year due to the impact of trade frictions as South Korea is a major trading partner of both the United States and China. China's yuan advanced 0.6 percent against the dollar and was the second best performer on the day. Ken Cheung, senior Asian FX strategist at Mizuho in Hong Kong said the renminibi was unlikely to breach the 7 per dollar level within this year. "If renminibi breaks 7, it will create some panic selling in the Asian markets. Right now, I think we see this kind of risk has been largely removed at this moment," said Cheung. The Indonesian rupiah rose 0.5 percent, while the Thai baht, Taiwan dollar and the Malaysian ringgit all, advanced about 0.25 percent each on the day. However, some analysts worry that the relief is temporary. "We expect a long-drawn negotiation process in 2019 but there is still a significant risk that both sides could fail to overcome their differences," UOB analysts said in a report. RUPEE The Indian rupee was down 0.6 percent, in contrast to solid gains in other regional currencies. The rupee's loss was due to a sharp rise in crude oil prices and the country's slower economic growth in the July-September quarter. India's economy grew a lower-than-expected 7.1 percent in the July-September quarter from a more than two-year high of 8.2 percent in the previous quarter, data showed on Friday. The Indian rupee is Asia's worst performer this year, with a decline of 8.8 percent against the dollar. RUPIAH The Indonesian rupiah rose 0.4 percent, despite comments from President Joko Widodo that Indonesia needs a stronger dollar to boost exports. On Friday, Bank Indonesia said it sees the rupiah as still undervalued. The rupiah gained more than 6 percent in November and it also broke past its 200-day moving average at the end of last week, considered a bullish sign. The following table shows rates for Asian currencies against the dollar at 0606 GMT. CURRENCIES VS U.S. DOLLAR Change as of 0606 GMT Currency Latest Previous Pct bid day Move Japan yen 113.500 113.46 -0.04 Sing dlr 1.367 1.3719 +0.37 Taiwan dlr 30.749 30.850 +0.33 Korean won 1111.60 1121.2 +0.86 0 Baht 32.790 32.89 +0.30 Peso 52.340 52.45 +0.21 Rupiah 14225.0 14300 +0.53 00 Rupee 70.035 69.59 -0.64 Ringgit 4.170 4.182 +0.29 Yuan 6.907 6.9590 +0.75 Change so far in 2018 Currency Latest End 2017 Pct bid Move Japan yen 113.500 112.67 -0.73 Sing dlr 1.367 1.3373 -2.17 Taiwan dlr 30.749 29.848 -2.93 Korean won 1111.60 1070.50 -3.70 0 Baht 32.790 32.58 -0.64 Peso 52.340 49.93 -4.60 Rupiah 14225.0 13565 -4.64 00 Rupee 70.035 63.87 -8.80 Ringgit 4.170 4.0440 -3.02 Yuan 6.907 6.5069 -5.79 (Additional reporting by Gaurav Dogra in Bengaluru Editing by Jacqueline Wong)