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EM ASIA FX-Singapore dlr hits 5-wk low on easing talk, won at 2-yr trough
July 14, 2015 / 5:38 AM / 2 years ago

EM ASIA FX-Singapore dlr hits 5-wk low on easing talk, won at 2-yr trough

* Singapore Q2 economy shrinks, stirs talk of c.bank easing
    * Offshore funds sell won, S.Korea exporters limit losses
    * Indonesia c.bank seen holding interest rate for rupiah

 (Adds more details, updates prices)
    By Jongwoo Cheon
    SINGAPORE, July 14 (Reuters) - The Singapore dollar hit a
five-week low on Tuesday as an unexpected economic contraction
in the second quarter revived expectations of further monetary
easing from the city-state's central bank.
    South Korea's won touched a two-year trough,
leading losses among emerging Asian currencies, as investors
shifted their focus from Greece and back to speculating on when
the U.S. Federal Reserve will start raising interest rates.
    The Singapore dollar lost as much as 0.4 percent to
1.3622 per U.S. dollar, its weakest since June 8, after
disappointing second-quarter growth data.
    Gross domestic product shrank 4.6 percent in the second
quarter from the previous three months on an annualised and
seasonally adjusted basis, government data showed. Sluggish
global demand hurt the manufacturing sector of the
trade-dependent economy. 
    The figures stoked talk that the Monetary Authority of
Singapore (MAS) may ease policy at its next scheduled policy
review in October. 
    "Markets will have to start pricing in a risk of an easing
by MAS into October," said Sean Yokota, head of Asia strategy
for Scandinavian bank SEB in Singapore.
    SEB's three-month target for the Singapore dollar is 1.4000,
Yokota added.
    In a Reuters poll on June 26, economists had expected 
Singapore's central bank to keep monetary policy steady in
October, seeing a recovery in core inflation later this year.
 
    At its April meeting, the MAS held off from further stimulus
after a surprise easing in January. 
        
    WON
    The won lost 0.9 percent to 1,141.1 per dollar, its weakest
since July 2013, as offshore funds sold the currency amid
overall strength in the U.S. dollar.
    The greenback held firm against a basket of major currencies
as investors focused on yield differentials between the United
States and other developed countries after Greece agreed to a
debt deal.
    Fed Chair Janet Yellen on Friday said she expects a rate
hike at some point this year. Investors were keeping an eye on
her congressional testimony on Wednesday.
    South Korea's exporters bought the won on dips for
settlements, limiting the currency's downside.
    
    RUPIAH
    Indonesia's rupiah slid, tracking its weakness in
non-deliverable forwards (NDFs).
    Leveraged funds and real money accounts sold the rupiah in
NDFs, traders said.
    Indonesia's central bank holds a monetary policy meeting
later on Tuesday where it is expected to keep the benchmark
interest rate unchanged, as it guards against inflation and
potentially more weakness in the rupiah. 
    Its governor on Monday said Bank Indonesia will keep
monetary policy tight because it does not want the rupiah to
weaken too much. 
        
    CURRENCIES VS U.S. DOLLAR
    Change on the day at 0530 GMT
  Currency    Latest bid   Previous day    Pct Move
  Japan yen       123.25         123.46       +0.17
  Sing dlr        1.3601         1.3570       -0.23
  Taiwan dlr      31.016         31.200       +0.59
  Korean won     1139.52        1130.60       -0.78
  Baht             34.05          34.00       -0.15
  Peso             45.20          45.16       -0.09
  Rupiah        13330.00       13296.00       -0.26
  Rupee            63.52          63.51       -0.02
  Ringgit         3.8050         3.8030       -0.05
  Yuan            6.2083         6.2084       +0.00
 
  Change so far in 2015
  Currency    Latest bid  End prev year    Pct Move
  Japan yen       123.25         119.66       -2.92
  Sing dlr        1.3601         1.3260       -2.51
  Taiwan dlr      31.016         31.718       +2.26
  Korean won     1139.52        1099.30       -3.53
  Baht             34.05          32.90       -3.37
  Peso             45.20          44.72       -1.06
  Rupiah        13330.00       12380.00       -7.13
  Rupee            63.52          63.03       -0.77
  Ringgit         3.8050         3.4965       -8.11
  Yuan            6.2083         6.2040       -0.07
 
 (Additional reporting by IFR Markets' Catherine Tan; Editing by
Shri Navaratnam)

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