June 20, 2018 / 7:09 AM / in 5 months

EM ASIA FX-Most currencies firm as investors re-assess trade war risks; Philippine peso falls

    * Outflows cause Philippine peso to decline; rate meeting
later in
the day
    * Indian rupee, S.Korean won firm most

 (Adds text, updates prices)
    By Aaron Saldanha
    June 20 (Reuters) - Many emerging Asian currencies firmed
against a steady dollar on Wednesday, a partial recovery from
the previous session's losses on fears of knock-on effects from
a China-US trade war.
    Wednesday's trade may reflect market participants' view of
China's responses so far as a simple lack of realistic options,
given the extent of US-China trade imbalance, Vishnu Varathan,
head of economics and strategy for Mizuho Bank, wrote in a note.
    "Technically, China does not have $200 billion worth of
imports from the United States to dangle as an equivalent
threat."
    The dollar index against a basket of six major peers
gained a meagre 0.05 percent to 95.133.
    China's yuan firmed 0.16 percent as the fixing
rate set by the central bank was firmer than
expected, despite it being its weakest in more than five months.

    The CSI300 index fell 0.5 percent to 3,602.71
points at the end of the morning session, while the Shanghai
Composite Index lost 0.6 percent. It had fallen by as
much as 1.2 percent earlier in the day. 
    Malaysia's ringgit was 0.1 percent weaker after news
that consumer prices rose 1.8 percent in May from a
year earlier on higher fuel and transport prices and rising
demand for food.
    The inflation rate in May was the quickest since January and
topped the 1.4 percent recorded in April.        
    Indonesia's currency market has been closed in the week to
date for public holidays, but the central bank said on Tuesday
that it was ready to respond to the U.S. Federal Reserve's
interest rate increase with another hike of its own to defend
the rupiah.
    The Singapore dollar and the Taiwan dollar
firmed 0.08 percent and 0.03 percent, respectively, while the
South Korean won firmed 0.31 percent.
    The Indian rupee strengthened 0.50 percent to claw
back some of the ground lost in Tuesday's 0.58 percent decline,
which left it at its lowest in more than three weeks.
    The Reserve Bank of India (RBI) is due to release the
minutes of its June policy meeting later on Wednesday.
    India's interim finance minister said on Tuesday the
government was open to discussing the RBI's demand for greater
powers to regulate the country's large but generally
underperforming state banks. Indian banks are burdened by 9.5
trillion rupees ($141 billion) of non-performing loans as of
last year.
        
    WEDNESDAY'S RATE DECISIONS
    
    The central banks of Thailand and the Philippines are
scheduled to hold meetings later in the day to decide monetary
policy but the performance of the currencies on the day were
starkly divergent. 
    Thailand's baht firmed 0.28 percent while the
Philippine peso slid 0.12 percent and was not far from
falling below a 12-year trough touched on Monday.
    With no change in Thailand's benchmark rate expected, the
baht firmed for the first time this week after losing more than
1 percent in the week to Tuesday's close after comments by the
Thai finance minister on Monday hurt the currency.

    The minister said that a weaker baht would help the country
and that he saw no reason for Thailand to raise interest rates. 
    Meanwhile, the Philippines faced outflows on Wednesday with
the country's benchmark equity index falling as much as
0.6 percent and heading for a fifth straight losing session.
    Opinions on the Philippine central bank potentially raising
rates are sharply divided, a Reuters poll found, with the weak
peso likely to be the deciding factor.   
        
    
    The following table shows rates for Asian currencies against
the dollar at 0536 GMT.      
    
    CURRENCIES VS U.S. DOLLAR   
 Change on day at 0536 GMT                                   
  Currency                    Latest bid   Previous  Pct Move
                                                day  
  Japan yen                 110.190          110.04     -0.14
  Sing dlr                  1.356            1.3567     +0.08
  Taiwan dlr                30.176           30.186     +0.03
  Korean won                1105.700         1109.1     +0.31
  Baht                      32.700            32.79     +0.28
  Peso                      53.329           53.263     -0.12
  Rupee                     68.040            68.38     +0.50
  Ringgit                   4.006             4.002     -0.10
  Yuan                      6.473            6.4830     +0.16
 * Indonesia closed for public holiday                       
  Change so far in 2018                                      
  Currency                  Latest bid    End 2017   Pct Move
  Japan yen                 110.190          112.67     +2.25
  Sing dlr                  1.356            1.3373     -1.35
  Taiwan dlr                30.176           29.848     -1.09
  Korean won                1105.700        1070.50     -3.18
  Baht                      32.700            32.58     -0.37
  Peso                      53.329            49.93     -6.37
  Rupiah                    13925.000         13565     -2.59
  Rupee                     68.040            63.87     -6.13
  Ringgit                   4.006            4.0440     +0.95
  Yuan                      6.473            6.5069     +0.53
 
 (Reporting by Aaron Saldanha in Bengaluru)
  
 
 
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