* Fed statement expected at 1800 GMT
* Taiwan dollar at strongest level since mid-2018
* Thai baht extends gains on new stimulus hopes
(Adds text, updates prices)
June 10 (Reuters) - Most emerging Asian currencies gained on
Wednesday, holding onto positive momentum on hopes of a quick
economic recovery even as caution set in ahead of a U.S.
Federal Reserve policy decision that may see focus turn toward
yield curve control.
Investor sentiment has been buoyant as most countries in
Asia have started the process of re-opening their economies and
U.S. data supported views that an economic recovery is on the
cards.
But hopes for a full-fledged recovery still seem a distant
possibility. Analysts are eyeing whether the Fed will pledge to
keep longer-term interest rates at a specific level in a move
more widely known as yield curve control. "Any slippage on Fed to address the rising UST yield issue
could hurt risk assets," analysts at Maybank said in a note.
The Thai baht THB=TH hit its strongest level since Feb. 17
against the U.S. dollar, while the Taiwanese dollar TWD=TP was
at a mid-2018 high.
Markets are also looking for confirmation from the Fed on
how long rates will stay where they are, said Sim Moh Siong, a
currency strategist at the Bank of Singapore, adding that
investors were taking positions ahead of the announcement.
"If the Fed continues to stay dovish and the weaker dollar
backdrop holds, there's a bit more scope for the central banks
to ease rates and that should be beneficial for the local bond
markets," he added.
Plans by the Thailand government to roll out further
stimulus to spur growth have been supporting the baht this week.
The Philippine peso PHP= advanced 0.4% to 49.846, while
stocks .PSI fell more than 3%. .SO
Imports plunged more than exports in April, narrowing the
trade deficit to its lowest in more than five years but pointing
to a collapse in domestic economic output. The economy is slated
to contract for the first time in more than two decades.
"The widening of the trade gap coupled with the absence of
usual dollar inflows from remittances could translate to a
swelling of the current account deficit, which could spark
renewed depreciation pressure on PHP in 2H," ING said in a note,
adding that the peso could weaken just over 52 per dollar by the
end of the year.
Meanwhile, the rupiah IDR=ID weakened 0.2% in volatile
trade.
Indonesia's central bank said the currency had more room to
appreciate, but analysts are worried that the rising number of
coronavirus cases may lead to new restrictions. VS U.S. DOLLAR AS AT 0524 GMT
Currency Latest bid Previous day Pct Move
Japan yen 107.520 107.72 +0.19
Sing dlr 1.386 1.3886 +0.21
Taiwan dlr 29.693 29.803 +0.37
Korean won 1192.500 1197.7 +0.44
Baht 31.150 31.335 +0.59
Peso 49.846 50.04 +0.39
Rupiah 13890.000 13860 -0.22
Rupee 75.455 75.61 +0.21
Ringgit 4.262 4.274 +0.28
Yuan 7.071 7.0765 +0.08
Change so far in 2020
Currency Latest bid End 2019 Pct Move
Japan yen 107.520 108.61 +1.01
Sing dlr 1.386 1.3444 -2.98
Taiwan dlr 29.693 30.106 +1.39
Korean won 1192.500 1156.40 -3.03
Baht 31.150 29.91 -3.98
Peso 49.846 50.65 +1.61
Rupiah 13920.000 13880 -0.29
Rupee 75.455 71.38 -5.40
Ringgit 4.262 4.0890 -4.06
Yuan 7.071 6.9632 -1.53