EM ASIA FX-Asian currencies in tight ranges as cbank decisions loom

Credit: REUTERS/© Kim Hong-Ji / Reuters

Asian currencies clung to tight ranges on Wednesday as investors awaited directional cues from major central bank meetings although the prospect of fresh stimulus and signs of easing in Sino-U.S. trade tensions supported some export-focused units.

By Shriya Ramakrishnan

Sept 11 (Reuters) - Asian currencies clung to tight ranges on Wednesday as investors awaited directional cues from major central bank meetings although the prospect of fresh stimulus and signs of easing in Sino-U.S. trade tensions supported some export-focused units.

Investor focus is now centred on to the European Central Bank's meeting on Thursday, which is expect to deliver a rate cut and set the tone for upcoming decisions by the U.S. Federal Reserve and the Bank of Japan next week.

The Philippine peso PHP= extended its losses, falling 0.2% against the dollar to its lowest level in over a week after data on Tuesday showed the trade deficit widening.

"Another interest rate cut by Bangko Sentral ng Pilipinas could compress real yields in the Philippines, potentially making onshore assets less attractive relative to regional peers with higher real yields," Han Tan, market analyst at FXTM said.

"Still, the peso should find support over the remainder of 2019 from expected inflows in line with the government’s infrastructure spending plans."

Tan said fresh stimulus globally would likely help prop up demand in some of the world’s biggest economies, which could have a positive spillover effect for the currencies of open and trade-dependent Asian economies.

The South Korean won KRW=KFTC strengthened 0.2% to the dollar, buoyed by data which showed Asia's fourth-largest economy notched up a rare gain in exports for the first 10 days of this month.

Capping the won's gains, however, were South Korean plans to file a complaint at the World Trade Organization over Japan's tighter export controls.

The Indian rupee INR=IN, which resumed trade after a holiday, edged lower, with investor focus shifting to inflation data due on Thursday.

Economists polled by Reuters see retail inflation rising to a 10-month high in August on higher food prices, while staying below the central bank's medium-term target of 4%, prompting expectations for a rate cut next month.

RINGGIT IN FOCUS

The Malaysian Ringgit MYR= was marginally lower ahead of a monetary policy decision on Thursday.

According to a Reuters poll, Malaysia's central bank is expected to keep its benchmark interest rate unchanged on Thursday, as it keeps room for potential easing later should global growth fall sharply.

Amid a deterioration in the currency, foreign investors sold both Malaysian equities and debt securities by a total of 2.7 billion ringgit ($646.71 million) in August, reversing the buying trend in June and July, according to a note by UOB Group.

The ringgit weakened 1.9% in August, and has lost about 1.1% so far this year.

The Southeast Asian nation's industrial production index rose at its slowest pace in five years in July as mining output slowed, government data showed on Wednesday.

CURRENCIES VS U.S. DOLLAR

Change on the day at 0502 GMT

Currency

Latest bid

Previous day

Pct Move

Japan yen

107.730

107.53

-0.19

Sing dlr

1.378

1.3797

+0.10

Taiwan dlr

31.208

31.230

+0.07

Korean won

1190.900

1193.3

+0.20

Baht

30.620

30.62

+0.00

Peso

52.130

52.02

-0.21

Rupiah

14050.000

14045

-0.04

Rupee

71.713

71.70

-0.02

Ringgit

4.175

4.17

-0.12

Yuan

7.112

7.1130

+0.01

Change so far in 2019

Currency

Latest bid

End 2018

Pct Move

Japan yen

107.730

109.56

+1.70

Sing dlr

1.378

1.3627

-1.13

Taiwan dlr

31.208

30.733

-1.52

Korean won

1190.900

1115.70

-6.31

Baht

30.620

32.55

+6.30

Peso

52.130

52.47

+0.65

Rupiah

14050.000

14375

+2.31

Rupee

71.713

69.77

-2.71

Ringgit

4.175

4.1300

-1.08

Yuan

7.112

6.8730

-3.36

($1 = 4.1750 ringgit)

(Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Sam Holmes)

((Shriya.Ramakrishnan@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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