May 17, 2018 / 6:21 AM / 2 months ago

EM ASIA FX-Most Asian currencies rise as dollar retreats, rupiah up before BI meeting

    * Malaysia's ringgit eases as GDP below expectations
    * Thai baht leads gains after holds rate
    * Focus on Bank Indonesia, rate hike seen 

 (Adds text, updates prices)
    By Nikhil Nainan
    May 17 (Reuters) - Most Asian currencies strengthened on
Thursday as the dollar retreated from the five-month high it
touched the previous day, with Thailand's baht gaining the most.
    The dollar index fell to 93.275 at 0527 GMT, down from
Wednesday's five-month peak of 93.632, as the euro
regained its footing at $1.1819.
    Khoon Goh, head of Asia research for ANZ said although
markets had seen U.S bond yields surge of late, he believes "it
has not really translated into a much stronger U.S. dollar".
     "I think we are just reaching a stage where after such a
strong run for the U.S. dollar...perhaps we are starting to see
some profit-taking as people reassess currencies at current
levels," he added.  
    Thailand's baht gained 0.4 percent as the central
bank maintained an accommodative monetary policy stance, keeping
its key interest rate at a near-record low.
    The widely expected policy rate decision kept the one-day
repurchase rate at 1.5 percent, the level it has been for more
than three years as the central bank works to support growth.
    The Singapore dollar was little changed after news
that non-oil exports rose sharply in April, surpassing
    South Korea's won slipped to 1079.6 per dollar,
on track to extend its losses for a third session.
    Comments from the South Korean central bank chief weighed on
the won after he called the economy's strength into question
following weak jobs growth data on Wednesday.

    The central bank also announced it would foster greater
transparency on its foreign exchange dealings in second-half
2018 after South Korea was labelled a currency manipulator by
the United States.
    The Indonesian rupiah recovered from Wednesday's more
than two-and-a-half year low, but remained around the 14,000
mark against the dollar ahead of the central bank meeting later
in the day.
    BI is widely expected to raise rates for the first time
since 2014 to support the rupiah, which has suffered from
slowing economic growth and the strong dollar.
    "If it's purely a rate hike and no other measures are
announced, it could be likely then that the market will then
look for BI to potentially to deliver more rate hikes," Goh
    "How the currency responds to any moves today will be quite
telling and its important to see whether or not BI will have to
do more." 
    The rupiah has been among the worst-performing currencies in
the region, falling 3.5 percent this year. 
    Malaysia's ringgit, which has come under ever-closer
scrutiny in the past week because of the general election there,
edged lower after news that the economy had slowed in the first
    The pressure is on the new government to turn around the
economy with changes to economic and fiscal policy.
    The new administration, led by Mahathir Mohamad, said it
will introduce a sales and service tax to partially offset the
shortfall in revenue caused by its decision to scrap a goods and
service tax from June.
    "Until we get more concrete policies on that front, I think
the ringgit will continue to trade quite cautiously," said Goh. 
 Change on the day at   0527 GMT                        
 Currency                     Latest bid  Previous day  Pct Move
 Japan yen                    110.310     110.38        +0.06
 Sing dlr                     1.341       1.3402        -0.05
 Taiwan dlr                   29.900      29.892        -0.03
 Korean won                   1079.600    1077.6        -0.19
 Baht                         32.010      32.135        +0.39
 Peso                         52.211      52.223        +0.02
 Rupiah                       14055.000   14088         +0.23
 Rupee                        67.728      67.79         +0.10
 Ringgit                      3.968       3.965         -0.08
 Yuan                         6.361       6.3705        +0.14
 Change so far in 2018                                  
 Currency                     Latest bid  End 2017      Pct Move
 Japan yen                    110.310     112.67        +2.14
 Sing dlr                     1.341       1.3373        -0.27
 Taiwan dlr                   29.900      29.848        -0.17
 Korean won                   1079.600    1070.50       -0.84
 Baht                         32.010      32.58         +1.78
 Peso                         52.211      49.977        -4.28
 Rupiah                       14055.000   13565         -3.49
 Rupee                        67.728      63.87         -5.70
 Ringgit                      3.968       4.0440        +1.92
 Yuan                         6.361       6.5069        +2.29

 (Reporting by Nikhil Kurian Nainan in Bengaluru
Editing by Eric Meijer)
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