July 8, 2019 / 6:08 AM / 2 months ago

EM ASIA FX-Most weaker as dollar firms on dashed U.S. rate cut hopes

    * S. Korean won top decliner as trade issues with Japan
weigh
    * Baht down, cenbank not happy with hot money into Thailand
    * Indian rupee set to snap ten straight gaining sessions

 (Adds text, updates prices)
    By Devika Syamnath
    July 8 (Reuters) - Most Asian currencies weakened on Monday
after the dollar took heart from strong U.S. jobs data that
tempered expectations for a rate cut from the Federal Reserve.
    Friday's strong U.S. jobs numbers for June reduced hopes for
a Fed rate cut, and investors are looking ahead to the Fed
chairman's testimony to Congress this week for clues on policy
direction. 
    The Korean won was the weakest Asian currency
with a 0.8% decline. Adding to the won's woes was a trade
skirmish with Japan, which has tightened export curbs on key
materials used by South Korean makers of chips and smartphone
displays.
    Thailand's baht receded 0.6% against the dollar,
cooling down from a recent rally as weak economic growth
reinforced calls for a central bank rate cut.
    Thailand's central bank is not happy with hot money flowing
into the country and has sometimes taken action on excessive
moves in the baht, the governor said on Monday.
    The baht remains Asia's best performer thanks to a weak
dollar, foreign fund inflows and the country's large current
account surplus.
    Malaysia's ringgit traded 0.2% lower ahead of its
central bank rate decision on Tuesday. The bank is expected to
keep its powder dry after cutting rates by 25 basis points in
May.
    Taiwan's dollar weakened 0.3% as the economy
grapples with slowing growth in China, Taiwan's biggest trade
partner.
    
    RESILIENT RUPEE
    India's rupee was 0.3% lower after having rallied
for ten straight sessions. In its budget released on Friday, the
government raised import tariffs and proposed easing foreign
investment norms in a bid to kickstart the economy. 
     India's fiscal deficit target for 2019/20 surprised at 3.3%
of gross domestic product (GDP). A Reuters poll had projected up
to 3.5% for the current fiscal year.
    "Going ahead we expect this fiscal conservatism and swirling
RBI (Reserve Bank Of India) rate cut expectations to undergird
demand for Indian govies (government bonds)," OCBC said in a
note.
    "Expect the INR to be one of the more resilient currencies
in the face of any bouts of USD strength," it added.
    
    The following table shows rates for Asian currencies against
the dollar at 0522 GMT.
    
    CURRENCIES VS U.S. DOLLAR
    
 Currency               Latest bid  Previous day  Pct Move
 Japan yen              108.300     108.45        +0.14
 Sing dlr               1.360       1.3594        -0.07
 Taiwan dlr             31.185      31.107        -0.25
 Korean won             1179.900    1170.4        -0.81
 Baht                   30.810      30.64         -0.55
 Peso                   51.300      51.329        +0.06
 Rupiah                 14125.000   14080         -0.32
 Rupee                  68.620      68.42         -0.29
 Ringgit                4.143       4.134         -0.21
 Yuan                   6.890       6.8940        +0.05
                                                  
 Change so far in 2019                            
 Currency               Latest bid  End 2018      Pct Move
 Japan yen              108.300     109.56        +1.16
 Sing dlr               1.360       1.3627        +0.17
 Taiwan dlr             31.185      30.733        -1.45
 Korean won             1179.900    1115.70       -5.44
 Baht                   30.810      32.55         +5.65
 Peso                   51.300      52.47         +2.28
 Rupiah                 14125.000   14375         +1.77
 Rupee                  68.620      69.77         +1.68
 Ringgit                4.143       4.1300        -0.30
 Yuan                   6.890       6.8730        -0.25
 

 (Reporting by Devika Syamnath in Bengaluru; editing by Darren
Schuettler)
  
 
 
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