In This Article:
* Dollar slips in holiday-thinned Asia trade
* Yuan edges up ahead of FTSE Russell bond index decision
* Yen hits 7wk high
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, Sept 21 (Reuters) - The dollar slipped and yen and yuan led Asia's currencies a little higher on Monday, as investors looked ahead to a slew of U.S. Federal Reserve speakers this week and to a decision on the inclusion of Chinese government bonds in a global index.
Moves were slight and volumes light due to a public holiday in Japan. The dollar index, which tracks the greenback against a basket of six major currencies, dipped 0.2% to 92.779.
The yen and yuan rose about 0.3% each, with the yen touching a seven-week peak of 104.27 per dollar and the yuan hovering just below a 16-month high it hit last week.
Foreigners' Chinese bond buying has helped put the yuan on a tear, lifting it nearly 6.5% in four months.
Investors are expecting FTSE Russell will include China in its World Government Bond Index on Thursday, likely triggering even more inflows and supporting the currency.
"The assets under management tracking this index is big...so we are seeing some pre-positioning taking place," said Bank of Singapore currency analyst Moh Siong Sim.
"But it's not just the index, the bigger picture here is that the (Chinese) economy is doing well, there's an interest-rate differential that is supporting the currency and a Biden victory (at the U.S. election) might provide further relief."
The yuan edged back toward last week's 16-month high in Asia, rising to 6.7570 in onshore trade and pulling with it the Australian, Singapore, New Taiwan dollars as well as the Malaysian ringgit.
The Aussie rose 0.4% to $0.7319, near the top end of its range of the last few weeks. The ringgit hit a seven-month high of 4.1100 on the dollar and the Singapore dollar made an eight-month peak of S$1.3543 per greenback.
The Taiwan dollar jumped 0.7% to a seven-year high of 28.935 per dollar, a move analysts said might be due to a combination of equity inflows and authorities seeking to project calm amid heightened cross-straits tensions.
YEN STRENGTH
The euro and sterling crept toward the top of ranges they have occupied for a couple of weeks, with the euro last at $1.1867 and sterling at $1.2958.
The yen looked to break new ground, extending a week of solid gains amid trepidation about the global economic outlook and perhaps a shift in the yen's drivers as central banks pin rates around the world at or below zero.