February 14, 2018 / 6:07 AM / 6 months ago

EM ASIA FX-Most Asian currencies firm as dollar slips ahead of U.S. inflation data

    * Asian currencies firm against the dollar
    * Dollar weakens ahead of U.S. inflation numbers
    * Korean won leads gains in the region

 (Adds text, updates prices)
    By Aditya Soni
    Feb 14 (Reuters) - Most Asian currencies strengthened on
Wednesday as the dollar fell ahead of U.S. inflation data that
could raise or lower expectations of faster rate hikes globally.
    The greenback fell 0.3 percent against a basket of
currencies with investors on edge ahead of CPI numbers.
    Headline consumer price inflation is expected to slow to an
annual 1.9 percent and core inflation to 1.7 percent, an outcome
that would calm investor nerves. 
    But investors worry that the inflation figures could
surprise on the high side as wages data did a couple of weeks
ago, triggering a global rout in equities that weighed quite
heavily on Asian currencies. 
    "I don't think today's moves in Asia FX are fundamentally
driven, it's just investors nibbling back in short USD positions
that worked in 2017 after the January correction," said Sean
Yokota, head of Asia strategy at Skandinaviska Enskilda Banken.
    "(Federal Reserve Chair Jerome) Powell's comment last night
alleviated concerns on Fed uncertainty, now if we get
disappointing CPI today, we are back to USD weakness." 
    In Seoul, investors pushed money into the equities market,
boosting the Korean won which led the gains in the
regional currencies, firming 0.6 percent to a near two-week
    The benchmark Kospi index climbed 1 percent,
supported by healthcare and technology stocks. 
    The Indonesian rupiah strengthened 0.3 percent, while
the Taiwan dollar edged higher. 
    The Thai Baht firmed 0.4 percent ahead of a
monetary policy decision from Thailand's central bank later in
the day.  
    The Bank of Thailand is expected to leave its policy rate
unchanged near record lows when it meets for its first review of
the year.
    The Philippine peso, the worst performing Asian
currency of 2018 so far, traded down 0.1 percent near an 11-1/2
year low. 
    The Malaysian ringgit firmed 0.4 percent. Growth 
data released earlier in the day showed that the economy
expanded 5.9 percent in the fourth quarter from a year earlier,
beating expectations.
    Stephen Innes, head of trading for Asia Pacific at Oanda
said that the ringgit's gains were more likely due to the
broader weakness in the U.S. dollar that is permeating across
the board in Asia rather than the GDP numbers. 
    Meanwhile, Malaysia's current account surplus
widened to 12.9 billion ringgit in the fourth quarter, from 12.5
billion ringgit in July-September.        
    The Singapore dollar firmed 0.3 percent after revised
figures showed that the city-state's gross domestic product grew
3.6 percent in 2017, the biggest expansion since 2014.

    However, Singapore is expecting a deceleration in economic
growth this year as exports slow. 
    The  Ministry of Trade and Industry said its central view is
for GDP growth in 2018 to come in slightly above the middle of
its forecast range of 1.5 to 3.5 percent.
    The Indian rupee firmed 0.3 percent on Wednesday. 
    Data out on Monday showed India's retail inflation eased
slightly in January from a 17-month high in December but
remained above the Reserve Bank of India's medium-term target of
4 percent for the third straight month.
    Last week, the RBI kept its main repo rate
unchanged, warning that it would closely monitor inflation but
also said economic growth needed to be "carefully nurtured". 

    The following table shows rates for Asian currencies against
the dollar at 0527 GMT.
 Change on the day                                      
 Currency                     Latest bid  Previous day  Pct Move
 Japan yen                    107.190     107.82        +0.59
 Sing dlr                     1.319       1.3221        +0.27
 Taiwan dlr                   29.302      29.358        +0.19
 Korean won                   1078.000    1084.5        +0.60
 Baht                         31.370      31.49         +0.38
 Peso                         52.010      51.98         -0.06
 Rupiah                       13620.000   13655         +0.26
 Rupee                        64.128      64.31         +0.28
 Ringgit                      3.923       3.937         +0.36
 Yuan                         6.332       6.3400        +0.13
 Change so far                                          
 Currency                     Latest bid  End 2017      Pct Move
 Japan yen                    107.190     112.67        +5.11
 Sing dlr                     1.319       1.3373        +1.42
 Taiwan dlr                   29.302      29.848        +1.86
 Korean won                   1078.000    1070.50       -0.70
 Baht                         31.370      32.58         +3.86
 Peso                         52.010      49.93         -4.00
 Rupiah                       13620.000   13565         -0.40
 Rupee                        64.128      63.87         -0.40
 Ringgit                      3.923       4.0440        +3.08
 Yuan                         6.332       6.5069        +2.77

 (Reporting by Aditya Soni in Bengaluru; Editing by Eric Meijer)
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