March 20, 2018 / 5:37 AM / 5 months ago

EM ASIA FX-Most currencies inch up but Indian rupee falls

    * Currencies ease off recent declines
    * Sentiment still subdued as Fed meet looms

 (Adds details, updates prices)
    By Ambar Warrick
    March 20 (Reuters) - Most Asian currencies edged up on
Tuesday, shaking off recent declines, as market participants
awaited clues from a Federal Reserve meeting on the outlook for
U.S. monetary policy.     
    The Federal Open Market Committee will begin a two-day
meeting later in the day, and is seen as certain to hike
interest rates for the first time this year.
    While a rate hike has been largely priced in by investors,
the focus is now on whether the Fed signals a faster pace of
tightening this year than earlier expected, and if that will
finally give a boost to the ailing dollar.
    "They (Asian currencies) haven't moved too much...tension
over the U.S. is still there, and I think that's reflected on
Asian currencies recently," said Sim Moh Siong, FX strategist at
Bank of Singapore.  
    " The downtrend that we've seen in the dollar has come to a
pause... I think we're likely to see a rangebound scenario for
the dollar heading into the FOMC meeting later this week."
    Regionally, the Taiwan dollar extended gains
against the dollar, rising about 0.16 percent.
    A Reuters poll showed that the country's central bank is
expected to stand pat on its key interest rate in a meeting on
Thursday as global demand for the island's electronics appears
to still be firm, a factor that has underpinned economic growth.
  
    The Singapore dollar rose about 0.1 percent. 
    The Chinese yuan also rose to the dollar, albeit
marginally. Fears of a trade war with the U.S. have pressured
the yuan of late, particularly after President Trump flagged
heavy tariffs on the import of electronics from China. 
    Parliament elevated a key confidante of President Xi Jinping
to one of the top positions in government on Monday as Beijing
cracks down on riskier financing and a debt build-up that may
pose systemic risks to the world's second-largest economy.

    Some traders believe China's central bank may follow a Fed
benchmark rate move with a modest increase in money market rates
after the country's top leaders signalled in parliament that
they will keep risk prevention at the top of their agenda this
year.
    
    INDIAN RUPEE
    The Indian rupee bucked the regional trend, easing
about 0.1 percent to the dollar. The rupee has been one of the
worst performers in Asia this year due largely to concerns about
the country's swelling current account deficit. 
    "India needs capital inflows to fund its current account
deficit which has more-than-doubled to 1.9 Percent of GDP in
April-December, " DBS said in a note.
    India's October-December current account deficit widened
sharply from a year earlier, driven by higher imports, data from
the Reserve Bank of India showed last week.
    "India’s financing requirements will keep the rupee
vulnerable to rising US rates this year, especially if they
weigh on global equities. Our view remains for the rupee to
depreciate towards 67 this year," DBS added.  
    The following table shows rates for Asian currencies against
the dollar on Tuesday.

    CURRENCIES VS U.S. DOLLAR
 Change on the day at   0518 GMT                        
 Currency                     Latest bid  Previous day  Pct Move
 Japan yen                    106.290     106.08        -0.20
 Sing dlr                     1.315       1.3168        +0.11
 Taiwan dlr                   29.155      29.201        +0.16
 Korean won                   1070.200    1071.6        +0.13
 Baht                         31.190      31.21         +0.06
 Peso                         52.110      52.1          -0.02
 Rupiah                       13763.000   13764         +0.01
 Rupee                        65.238      65.17         -0.11
 Ringgit                      3.914       3.916         +0.05
 Yuan                         6.327       6.3308        +0.06
                                                        
 Change so far in 2018                                  
 Currency                     Latest bid  End 2017      Pct Move
 Japan yen                    106.290     112.67        +6.00
 Sing dlr                     1.315       1.3373        +1.66
 Taiwan dlr                   29.155      29.848        +2.38
 Korean won                   1070.200    1070.50       +0.03
 Baht                         31.190      32.58         +4.46
 Peso                         52.110      49.93         -4.18
 Rupiah                       13763.000   13565         -1.44
 Rupee                        65.238      63.87         -2.10
 Ringgit                      3.914       4.0440        +3.32
 Yuan                         6.327       6.5069        +2.84
 
 (Reporting by Ambar Warrick in Bengaluru; Editing by Kim
Coghill)
  
 
 
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