May 11, 2018 / 6:37 AM / a year ago

EM ASIA FX-Most Asian units up as dollar slips on soft U.S. inflation data

    * Indonesia rupiah on track for a fourth weekly loss
    * Indian rupee likely to log fifth week of losses
    * Malaysian ringgit NDFs pare some of Thursday's losses 

 (Adds text, updates prices)
    By Nikhil Nainan
    May 11 (Reuters) - Most emerging Asian currencies gained on
Friday as the greenback eased on softer-than-expected U.S.
inflation data, allaying worries that the Federal Reserve might
aggressively hike interest rates this year.
    The dollar hovered below a 4-1/2 year high against a
basket of currencies at 92.706 at 0529 GMT.
    U.S. consumer price data suggested that inflation was
increasing at a moderate pace.  However, with rising oil prices
and President Donald Trump's decision to exit the Iranian
nuclear deal, price pressure is expected to accelerate in the
coming months.
    The Fed's next meeting is in mid-June.
    Stephen Innes, head of Asia-Pacific trading at Oanda, said
in a note that U.S. retail sales on May 12 will "provide the
next U.S. dollar guidepost".
    The Indonesian rupiah, which this week reached 2-1/2
year lows, strengthened 0.4 percent to 14,020 a dollar,
following increasingly hawkish comments from Bank Indonesia to
support the currency.
    The comments suggested to some the central bank will hike
rates at a meeting that ends on May 17. 
    The rupiah looked set to post a fourth weekly loss.
    Financial markets in Malaysia remained closed for a second
day following its historic election result that brought Mahathir
Mohamad back as prime minister. 
    In offshore trading, ringgit one-month and three-month
non-deliverable forwards pared some
of Thursday's 4 percent losses. 
    The Singapore dollar showed little movement from
Thursday's close of 1.3372 per dollar, as traders weighed
political developments across the border in Malaysia. 
    The peso slipped 0.3 percent to 52.066 a dollar
following gains on Thursday, when the central bank raised
interest rates for the first time in three years.
    "The rate hike was highly anticipated already and when the
peso dropped below 52 a dollar, that was the effect of the rate
hike," said Manny Cruz, analyst with Asiasec Equities Inc.
    India's rupee strengthened 0.2 percent, ahead of
Saturday's election in the state of Karnataka and April
industrial output data later in the day. The currency is on
track to log a fifth straight week of losses.
    Karnataka and its capital city, Bangalore, dubbed India's
Silicon Valley, is the first major state election this year
which may give the current government a foothold in the south of
the country ahead of next year's general election.
    "Markets are coming around the view that the 2019 general
elections might see the ruling coalition, National Democratic
Alliance, stay in the lead but fall short of an absolute
majority in the lower house," said DBS Bank said a note.
    Considering elections, "Reserve Bank of India may also have
to act proactively to temper bond and forex market volatility
through various interventions, beyond regular forex
 Change on the day at   0527 GMT                        
 Currency                     Latest bid  Previous day  Pct Move
 Japan yen                    109.450     109.38        -0.06
 Sing dlr                     1.337       1.3372        +0.02
 Taiwan dlr                   29.748      29.872        +0.42
 Korean won                   1068.200    1073.1        +0.46
 Baht                         31.920      32.05         +0.41
 Peso                         52.066      51.899        -0.32
 Rupiah                       14020.000   14070         +0.36
 Rupee                        67.205      67.31         +0.15
 Yuan                         6.344       6.3460        +0.04
 Change so far in 2018                                  
 Currency                     Latest bid  End 2017      Pct Move
 Japan yen                    109.450     112.67        +2.94
 Sing dlr                     1.337       1.3373        +0.03
 Taiwan dlr                   29.748      29.848        +0.34
 Korean won                   1068.200    1070.50       +0.22
 Baht                         31.920      32.58         +2.07
 Peso                         52.066      49.977        -4.01
 Rupiah                       14020.000   13565         -3.25
 Rupee                        67.205      63.87         -4.96
 Yuan                         6.344       6.5069        +2.58

 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by
Richard Borsuk)
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