July 19, 2019 / 5:59 AM / 2 months ago

EM ASIA FX-Most Asian units rise as dollar weakens on dovish Fed talk

    * SKorean won and Indonesian rupiah on track for 0.6% weekly
    * Markets raise bets on aggressive cut after dovish Fed talk
    * Thai baht strengthens after Fitch outlook upgrade

 (Adds text, updates prices)
    By Rashmi Ashok
    July 19 (Reuters) - Most emerging Asian currencies rose
against a weaker dollar on Friday after a dovish speech by a top
Federal Reserve official sealed market expectations of a U.S.
rate cut in July
    New York Fed President John Williams said on Thursday that
it was imperative for policymakers to add stimulus early to deal
with low inflation when rates are near zero, instead of waiting
for an economic disaster to unfold.
    The news drove down the dollar index to a two-week
low of 96.671 on Thursday, and on Friday there was only a
marginal recovery, giving Asian currencies a fillip. 
    "The market anticipates at least a 25 basis points at the
end of the July FOMC but after the comments from the policymaker
the probabilities of a deeper rate cut have risen," said Alfonso
Esparza, senior market analyst at OANDA.
    Although a later clarification from a Fed representative
said the speech was academic in nature and not about decisions
at the Fed's coming policy meet, that did little to dent the
upbeat mood.
    All Asian units were on track to rise for the week, except
for the Indian rupee which was marginally lower.
    The Korean won and the Indonesian rupiah
led gains in the region for the week, with both set to add about
    After Bank Indonesia and Bank of Korea's rate cuts on
Thursday, analysts expect further easing among Asian central
banks, emboldened by rising signs that the Fed will remain
dovish in the near future.
    "Over the coming few quarters, we can expect more rate cuts
from India, Indonesia, Malaysia, the Philippines and South
Korea," analysts at DBS Research Group said.
    The Thai baht added 0.4% and was among top
performers on Friday after ratings agency Fitch revised its
outlook on Thailand to "positive" from "stable".
    Fitch forecast that external finances will remain robust,
adding "we expect the current account surplus to remain high
relative to peers... supported by tourism inflows and a goods
surplus, despite slowing exports." 
    The agency said it expects the Thai central bank to keep
rates on hold during 2019.
    "The baht's strength relative to regional peers could weigh
on Thailand's export competitiveness, but it is unclear that
this has manifested itself yet, with recent export declines
broadly in line with peers," Fitch said. 
    The baht is the region's best performer this year, adding
about 5.9% against the dollar.

The following table shows rates for Asian currencies against the
dollar at 0518 GMT.
 Currency               Latest bid  Previous day  Pct Move
 Japan yen              107.570     107.29        -0.26
 Sing dlr               1.356       1.3565        +0.01
 Taiwan dlr             31.058      31.077        +0.06
 Korean won             1173.800    1178.8        +0.43
 Baht                   30.750      30.88         +0.42
 Peso                   50.990      50.92         -0.14
 Rupiah                 13905.000   13955         +0.36
 Rupee                  68.815      68.95         +0.20
 Ringgit                4.108       4.113         +0.12
 Yuan                   6.876       6.8805        +0.07
 Change so far in 2019                            
 Currency               Latest bid  End 2018      Pct Move
 Japan yen              107.570     109.56        +1.85
 Sing dlr               1.356       1.3627        +0.46
 Taiwan dlr             31.058      30.733        -1.05
 Korean won             1173.800    1115.70       -4.95
 Baht                   30.750      32.55         +5.85
 Peso                   50.990      52.47         +2.90
 Rupiah                 13905.000   14375         +3.38
 Rupee                  68.815      69.77         +1.39
 Ringgit                4.108       4.1300        +0.54
 Yuan                   6.876       6.8730        -0.04

 (Editing by Richard Borsuk)
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