REUTERS - Most emerging Asian currencies traded within a narrow range on Tuesday as investors waited to see if Federal Reserve Chair Janet Yellen would stick to her positive economic outlook at an event later in the day.
The Fed chair is due to join a discussion in London on global economic issues that takes place after a recent batch of weak U.S. economic data.
This year, the Fed has raised rates twice, and it has forecast one more hike in 2017.
Financial conditions have loosened in the past year despite the Fed raising interest rates three times since December, which is another reason to continue tightening, New York Fed President William Dudley said in remarks published on Monday.
“On an otherwise quiet day, market participants will likely focus on Fed Chair Yellen’s speech”, Societe Generale said in a note.
“Her words will be scrutinised for any colour about the timing of the next rate hike against a backdrop of mounting concerns over the inflation outlook.”
Showing how little regional currencies moved, the Indian rupee was the big gainer, though it only edged up 0.1 percent.
U.S. President Donald Trump urged Indian Prime Minister Narendra Modi to do more to relax Indian trade barriers on Monday.
Among other Asian currencies, the Thai baht and the Singapore dollar were flat against the dollar.
The Philippine peso was among the biggest losers, shedding 0.1 percent.
The currency has been among the worst performers in the region this year, weakening about one percent against the dollar.
The won rose as much as 0.3 percent early Tuesday but then the gains were erased.
South Korea’s consumer sentiment improved for a fifth straight month in June, reaching a six and a half-year high, a central bank survey showed on Tuesday.
Sentiment was also buoyed by the Korea Composite Stock Price Index (KOSPI) which touched a record high of 2,397.14, boosted by expectations of a strong second quarter.
Foreign investors have been net buyers on KOSPI for three consecutive sessions.
The Taiwan dollar inched up 0.1 percent to 30.320, heading for its fourth-straight day of gains.
“Taiwan’s currency is likely to remain stuck in its current trading range of 30.0-30.5 for now, but could face intermittent depreciation pressure in July or the third quarter,” Scotiabank said in a note.
“We would like to sell USD/TWD if it breaks below the 30.0 support but to buy the pair if it rallies through the 30.5 mark,” the brokerage added.
The currency has been among the best performers in Asia this year, appreciating more than 6 percent against the dollar.
($1 = 1,136.2000 won)
Reporting by Shashwat Pradhan in Bengaluru; Editing by Richard Borsuk