June 13, 2018 / 6:05 AM / 6 days ago

EM ASIA FX-Asia currencies softer on outflow worry ahead of Fed outcome

 (Adds text, updates prices)
    By Patturaja  Murugaboopathy 
    June 13 (Reuters) - Asian currencies edged lower on
Wednesday, ahead of the U.S. Federal Reserve's policy decision
on fears that a hawkish tone could affect regional assets and
trigger more capital outflows.
    Beside the expected announcement of a quarter-point rate
rise, investors will be looking for clues on the pace of future
rate hikes from the Fed's "dot plot" that could signal whether
most of its policy committee now expect more than three rate
increases this year.
    The "dot plot" is policymakers' rate projections and
provides a view into their interest rate outlook.
    "Given that, it is the combination of higher Fed rates and
the run down in its balance sheet that is pressuring emerging
markets, an aggressive Fed puts more pressure on Asian
currencies," said Greg McKenna, Chief Market Strategist at
    The dollar index against a basket of six major currencies
 inched up 0.03 percent to 93.829 after rising 0.25
percent the previous day.
    The Indian rupee dropped 0.2 percent on concerns
over price pressures, after data on Tuesday showed retail
inflation accelerating to a four-month high of 4.87 percent in
    The Malaysian ringgit also shed 0.15 percent on weak
equities, lower oil prices and foreign outflows. In May,
foreigners sold a net $4.7 billion in Malaysian bond and equity
markets, the biggest amount in more than a year.
    The Philippine peso touched its lowest since June
2006 on concerns over the country's high inflation rates.  
    Inflation picked up further in May, bringing the average
rate in the first five months of the year to 4.1 percent,
outside the central bank's 2-4 percent comfort range.

    On Wednesday, the Philippine central bank said it will
consider not just recent inflation data but all potential
drivers of future inflation when it reviews monetary policy next
    Investors were also watching out for the European Central
Bank policy meeting on Thursday, in which it could signal
intentions to start unwinding its massive bond purchasing
    "We still think ECB may not commit to a decision on exit
prematurely before inflation shows signs of reacceleration but
the narrative out of the debate (hawkish hold) could still be
supportive of EUR," Saktiandi Supaat, head of FX research at
Maybank in Singapore, said in a report. 
    The following table shows rates for Asian currencies against
the dollar at 0530 GMT.

       Change as of  0530 GMT                               
  Currency                           Latest  Previous    Pct
                                        bid       day   Move
  Japan yen                         110.620    110.36  -0.24
  Sing dlr                          1.337      1.3361  -0.04
  Taiwan dlr                        29.868     29.860  -0.03
  Baht                              32.100     32.075  -0.08
  Peso                              52.990      52.95  -0.08
  Rupee                             67.565      67.48  -0.13
  Ringgit                           3.994       3.988  -0.15
  Yuan                              6.403      6.4040  +0.01
  *Indonesian and S.Korean markets                          
           are closed for holidays                     
  Change so far in 2018                                     
  Currency                          Latest   End 2017    Pct
                                    bid                 Move
  Japan yen                         110.620    112.67  +1.85
  Sing dlr                          1.337      1.3373  +0.04
  Taiwan dlr                        29.868     29.848  -0.07
  Korean won                        1077.20   1070.50  -0.62
  Baht                              32.100      32.58  +1.50
  Peso                              52.990      49.93  -5.77
  Rupiah                            13925.0     13565  -2.59
  Rupee                             67.565      63.87  -5.47
  Ringgit                           3.994      4.0440  +1.25
  Yuan                              6.403      6.5069  +1.62

 (Reporting by Patturaja Murugaboopathy in Bengaluru
Editing by Jacqueline Wong)
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