EM ASIA FX-Most Asian currencies becalmed ahead of Fed decision

Credit: REUTERS/THOMAS WHITE

Most emerging Asian currencies held in a narrow range on Tuesday, reflecting investors' caution ahead of a U.S. Federal Reserve meeting that is expected to lay the groundwork for a rate cut later this year.

By Shriya Ramakrishnan

June 18 (Reuters) - Most emerging Asian currencies held in a narrow range on Tuesday, reflecting investors' caution ahead of a U.S. Federal Reserve meeting that is expected to lay the groundwork for a rate cut later this year.

The Fed's two-day meeting concludes on Thursday. It is expected to leave borrowing costs unchanged and provide insight into the impact of the U.S.-China trade war, Trump's insistence on lower interest rates and recent weaker economic data.

"With scant data releases and no significant developments on the trade front, the mood in Asia will likely remain cautious with investors awaiting the FOMC meeting and possible adjustments to the dot plots before taking on substantial bets," ING said a note.

Leading declines in the region, the Thai baht THB=TH shed 0.2% against the greenback, while the Singapore dollar SGD= was largely unchanged.

Investor focus will also turn to a slew of regional central bank meetings later this week. Central banks around the globe have begun to adopt a dovish trend to support their economies amid increasing pressure on global growth as the U.S.-China trade war drags on.

The central banks of Philippines, Indonesia and Taiwan will decide on their respective benchmark interest rates on Thursday.

Weaker crude prices helped in limiting losses in currencies of the region's net importers, with the Indian rupee INR=IN gaining 0.2% against the greenback, and the Philippine peso PHP= also strengthened.

The Malaysian ringgit MYR= and the Chinese yuan CNY=CFXS edged lower on the day.

THE PHILIPPINE PESO

The Philippine peso was the best performer on the day, strengthening as much as 0.3% against the greenback.

Data released on Monday showed Filipinos working overseas sent home $2.44 billion in April, an increase of 4% compared with a year ago.

ING said in a note that overseas remittances were still below market expectations which could indicate that the current account remains in substantial deficit in the second quarter.

Last week, the central bank flagged a wider current account deficit for the year, as the outlook for exports deteriorated amid weaker global demand.

CURRENCIES VS U.S. DOLLAR

Change on the day at 0507 GMT

Currency

Latest bid

Previous day

Pct Move

Japan yen

108.320

108.55

+0.21

Sing dlr

1.371

1.3706

-0.01

Taiwan dlr

31.520

31.520

+0.00

Korean won

1185.500

1186.5

+0.08

Baht

31.360

31.31

-0.16

Peso

52.140

52.24

+0.19

Rupiah

14330.000

14330

+0.00

Rupee

69.783

69.90

+0.17

Ringgit

4.181

4.177

-0.10

Yuan

6.927

6.9258

-0.01

Change so far in 2019

Currency

Latest bid

End 2018

Pct Move

Japan yen

108.320

109.56

+1.14

Sing dlr

1.371

1.3627

-0.59

Taiwan dlr

31.520

30.733

-2.50

Korean won

1185.500

1115.70

-5.89

Baht

31.360

32.55

+3.79

Peso

52.140

52.47

+0.63

Rupiah

14330.000

14375

+0.31

Rupee

69.783

69.77

-0.02

Ringgit

4.181

4.1300

-1.22

Yuan

6.927

6.8730

-0.77

(Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Simon Cameron-Moore)

((Shriya.Ramakrishnan@thomsonreuters.com; +918067491695; Reuters Messaging: shriya.ramakrishnan.thomsonreuters.com@reuters.net))

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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