* U.S.-China rekindle trade talks ahead of G20 summit
* Fed expected to sound more dovish
* ECB's Draghi seen heralding easing wave
* Yuan at over 3-wk high
(Adds text, updates prices)
June 19 (Reuters) - The rekindling of U.S.-China trade
talks, along with hopes and expectations of lower U.S. interest
rates and monetary easing in Europe helped most Asian currencies
advance on Wednesday, with units of export driven economies
leading the way. Investors' focus was first on how dovish the Federal Reserve
sounds when its policymakers wrap up a two day meeting later in
the global day. While few analysts expect a rate cut this time,
chances of one later, maybe as early as next month, appear high.
Next week attention will fully switch to U.S. President
Donald Trump's meeting with Chinese counterpart Xi Jinping
during a Group of 20 meeting in Japan, with Asia's exporters
hoping the world's two largest economies can begin de-escalating
their trade war.
DBS strategists said in a note: "Unlike the G20 Summit last
December, there will be more caution than optimism in expecting
both countries to return to the negotiation table and hold off
Trump's threat to hit, after next week's G20 Summit, a 25%
tariff on the remainder USD325bn of Chinese goods."
Helping the general improvement in risk sentiment, European
Central Bank Governor Mario Draghi said on Tuesday the ECB would
ease policy again if inflation failed to accelerate. Draghi's
surprising turnaround on easing sparked speculation of a
worldwide wave of central bank stimulus.
Stocks globally cheered the development, with benchmark
indexes of export reliant Asian economies like South Korea and
Taiwan advancing over 1% each.
Their currencies, which track movements in domestic stocks,
strengthened 0.7% and 0.5% respectively.
Meanwhile, the yuan CNY=CFXS jumped to an over three-week
high in its second straight day of advances.
After the Fed wraps up, the Philippine and Indonesian
central banks are set to meet on Thursday to review monetary
policy.
While most analysts see both banks holding policy rates
steady, they expect regional central banks to ride the easing
wave in the near future.
"Though we think BI (Bank Indonesia) can kick off its easing
cycle as early as this week, the odds that BI will act after the
G20 summit is also fairly high given that it has maintained a
cautious stance so far this year," Zhu Huani from Mizuho's Asia
& Oceania treasury department said in a note.
The rupiah IDR=ID strengthened 0.35%, while the peso
PHP= and the Singapore dollar SGD= were the day's only
outliers, over 0.1% weaker each.
CURRENCIES VS U.S. DOLLAR
Currency Latest bid Previous day Pct Move
Japan yen 108.370 108.44 +0.06
Sing dlr 1.368 1.3662 -0.12
Taiwan dlr 31.372 31.528 +0.50
Korean won 1177.300 1185.8 +0.72
Baht 31.243 31.33 +0.28
Peso 51.890 51.81 -0.15
Rupiah 14270.000 14320 +0.35
Rupee 69.565 69.70 +0.19
Ringgit 4.174 4.18 +0.14
Yuan 6.905 6.9200 +0.22
Change so far in 2019
Currency Latest bid End 2018 Pct Move
Japan yen 108.370 109.56 +1.10
Sing dlr 1.368 1.3627 -0.37
Taiwan dlr 31.372 30.733 -2.04
Korean won 1177.300 1115.70 -5.23
Baht 31.243 32.55 +4.19
Peso 51.890 52.47 +1.12
Rupiah 14270.000 14375 +0.74
Rupee 69.565 69.77 +0.29
Ringgit 4.174 4.1300 -1.05
Yuan 6.905 6.8730 -0.46