EM ASIA FX-Emerging Asian currencies subdued ahead of U.S. jobs data

Credit: REUTERS/NAVESH CHITRAKAR

Emerging Asian currencies were subdued on Friday as investors stayed cautious ahead of U.S. employment data likely to help determine the Federal Reserve's path on monetary policy.

By Aditya Soni

July 5 (Reuters) - Emerging Asian currencies were subdued on Friday as investors stayed cautious ahead of U.S. employment data likely to help determine the Federal Reserve's path on monetary policy.

Expectations of a July interest rate cut have risen lately due to a raft of weak U.S. economic data, and Friday's non-farm payrolls figures for June could cement or reduce chances of easing.

ANZ Research said it was sceptical that the Fed would act from one data point alone.

However, it added that "if the numbers confirm a loss of momentum in the labour market or are extremely weak, the focus will return immediately to the potential for a 50bps cut."

The Indian rupee INR=IN, the biggest mover in the region, weakened the most in two weeks ahead of country's federal budget due later in the day.

The budget, the first since Prime Minister Narendra Modi secured a second term by a landslide, is likely to cut taxes on business and raise spending in a bid to shore up consumption and faltering economic growth.

The Korean won KRW=KFTC slid 0.2%, in tandem with the local share benchmark .KS11 which dropped after Samsung Electronics' 005930.KS second-quarter profit guidance added to investor concerns over the country's memory chip exports.

The forecast further underlines the strain the Sino-U.S. trade war is putting on trade-dependent South Korea.

The won was headed for a weekly decline of 1.4%, which would be its biggest since mid-May.

The Thai baht THB=TH dipped 0.2%, putting it on track to have a five-week winning streak snapped.

The currency has strongly outperformed its peers this year but came under pressure this week as the Bank of Thailand (BOT) expressed worries about the baht's strength.

Slowing economic growth and contraction in exports has also sparked speculation that the Thai central bank could cut interest rates.

On Wednesday, the BOT said it is not closing the door to easing monetary policy.

BETS ON ASIAN UNITS

Investors scaled back bearish bets on most Asian currencies, a Reuters poll showed on Thursday, with risk appetites returning to markets after the United States and China agreed to restart trade talks.

Bearish bets on the Chinese yuan CNY=CFXS more than halved, while markets turned bullish on the Indian rupee and Philippine peso PHP=.

The following table shows rates for Asian currencies against the dollar at 0430 GMT.

CURRENCIES VS U.S. DOLLAR

Currency

Latest bid

Previous day

Pct Move

Japan yen

107.840

107.79

-0.05

Sing dlr

1.356

1.3558

-0.02

Taiwan dlr

31.111

31.102

-0.03

Korean won

1170.600

1168.6

-0.17

Baht

30.700

30.65

-0.16

Peso

51.120

51.12

+0.00

Rupiah

14143.000

14135

-0.06

Rupee

68.680

68.50

-0.27

Ringgit

4.134

4.131

-0.07

Yuan

6.877

6.8713

-0.08

Change so far in 2019

Currency

Latest bid

End 2018

Pct Move

Japan yen

107.840

109.56

+1.59

Sing dlr

1.356

1.3627

+0.49

Taiwan dlr

31.111

30.733

-1.22

Korean won

1170.600

1115.70

-4.69

Baht

30.700

32.55

+6.03

Peso

51.120

52.47

+2.64

Rupiah

14143.000

14375

+1.64

Rupee

68.680

69.77

+1.59

Ringgit

4.134

4.1300

-0.10

Yuan

6.877

6.8730

-0.06

(Reporting by Aditya Soni in Bengaluru; Editing by Richard Borsuk)

((Aditya.Soni@thomsonreuters.com; +91 80 6749 1130; Reuters Messaging: Aditya.Soni.thomsonreuters.com@reuters.net))

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