July 17, 2019 / 5:41 AM / a month ago

EM ASIA FX-Weaker as U.S. data lessens chance of aggressive Fed easing

    * Rupiah eases, cenbank expected to cut rates on Thursday
    * Korean won slips ahead of BOK policy meeting
    * Rising crude weighs on rupee, rupiah

 (Adds text, updates prices)
    By Rashmi Ashok
    July 17 (Reuters) - Emerging Asian currencies weakened
against a firmer dollar on Wednesday, as robust U.S. retail
sales trimmed chances of aggressive policy easing by the Federal
    U.S. retail sales rose more than expected in June, data
showed on Tuesday, tempering expectations of a 50 basis point
cut in July that markets had earlier expected.
    "The surprise retail sales indicator in the United States is
putting a big question mark on the number of interest rate cuts
the Fed can get away with," Alfonso Esparza, senior market
analyst at OANDA, said in a note.
    "A July rate cut of 25 basis points is fully priced in, but
improving fundamentals could give some breathing room to the Fed
despite the wishes of the White House," he said.
    The Philippine peso was the biggest decliner, off
0.4% against the greenback. 
    Rising crude prices stepped up pressure on the currencies of
major net oil importers, with the Indian rupee and the
Indonesian rupiah both weakening.
    The rupiah fell for a second session, ahead of a central
bank meeting due on Thursday. 
    Bank Indonesia (BI) Governor Perry Warjiyo has been hinting
at a possible rate cut recently, saying "there is room to lower
the rate" after a positive year for the rupiah.
    With Fed Chairman Jerome Powell all but cementing a rate cut
in July and Indonesian President Joko Widodo stepping up
pressure on the government to spur growth, a majority of
analysts polled by Reuters expected a rate cut on Thursday.
    The trade-sensitive Korean won slid 0.2%, after U.S.
President Donald Trump said on Tuesday the United States "still
has a long way to go" to conclude a trade deal with China and
threatened additional tariffs if needed.
    A possible rate cut by the Bank of Korea at its policy
review on Thursday also weighed on the currency, which is the
region's worst performer this year with a decline of 5.5%. 
    "The trade spat with Japan exacerbating sluggish trade
conditions, diminishing fiscal space and deteriorating domestic
demand may tip the BOK into a rate cut sooner rather than later;
and perhaps as soon as this week," analysts at Mizuho Bank said
in a note.
    South Korea's exports have been hit by the Sino-U.S. trade
war and investors are also bracing for the impact of Japan's
export curbs to Korea. Furthermore, domestic demand has 
moderated, adding to the central bank's worries.
    The following table shows rates for Asian currencies against
the dollar at 0459 GMT.
 Currency               Latest bid  Previous day  Pct Move
 Japan yen              108.190     108.22        +0.03
 Sing dlr               1.360       1.3582        -0.15
 Taiwan dlr             31.060      31.042        -0.06
 Korean won             1180.000    1177.6        -0.20
 Baht                   30.900      30.89         -0.03
 Peso                   51.080      50.89         -0.37
 Rupiah                 13960.000   13930         -0.21
 Rupee                  68.805      68.71         -0.14
 Ringgit                4.114       4.11          -0.10
 Yuan                   6.883       6.8760        -0.10
 Change so far in 2019                            
 Currency               Latest bid  End 2018      Pct Move
 Japan yen              108.190     109.56        +1.27
 Sing dlr               1.360       1.3627        +0.18
 Taiwan dlr             31.060      30.733        -1.05
 Korean won             1180.000    1115.70       -5.45
 Baht                   30.900      32.55         +5.34
 Peso                   51.080      52.47         +2.72
 Rupiah                 13960.000   14375         +2.97
 Rupee                  68.805      69.77         +1.40
 Ringgit                4.114       4.1300        +0.39
 Yuan                   6.883       6.8730        -0.14

 (Reporting by Rashmi Ashok in Bengaluru
Editing by Jacqueline Wong)
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