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EM ASIA FX-Asian units up as slowdown fears lift hopes for Fed rate cuts

Published 10/03/2019, 03:11 PM
Updated 10/03/2019, 03:20 PM
© Reuters.  EM ASIA FX-Asian units up as slowdown fears lift hopes for Fed rate cuts
USD/SGD
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USD/MYR
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USD/PHP
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* Thai baht gains most among regional peers
* Large policy easing most likely for Singapore - SocGen

(Adds text, updates prices)
By Devika Syamnath
Oct 3 (Reuters) - Most Asian currencies edged up on Thursday
as weak U.S. economic data renewed hopes that the Federal
Reserve will resume making rates cuts to prop up growth rate in
the United States.
Soft manufacturing and employment data from the United
States has cemented signs of a slowdown in the world's largest
economy, while Washington on Wednesday announced new tariffs on
imports from Europe, which could draw a tit-for-tat response.
MKTS/GLOB
Sim Moh Siong, FX strategist at Bank of Singapore, said
increasing fear of a global slowdown has generated hopes the Fed
"might step up to the plate in providing more rate cuts".
The Fed's next policy meeting is at the end of October.
Bets on a rate cut, which have increased, could rise further
if U.S. September non-farm payrolls due later on Friday shows
weakness in the labour market.
On Thursday, the Thai baht THB=TH strengthened most among
regional currencies, tacking on 0.3%.
A current account surplus and strong foreign reserves have
helped the baht, Asia's best performing currency, but extended
strength in the unit has put pressure on the export-reliant
economy and prompted central bank moves to curb inflows.
Malaysia's ringgit MYR= and the Philippine peso PHP=
both advanced 0.2% against the greenback.
Singapore's dollar SGD= inched up 0.1%. The city-state is
especially sensitive to trade war frictions, and analysts
increasingly see substantial policy easing ahead.
"Current macro conditions are as weak, or weaker, than when
the MAS (Monetary Authority of Singapore) has reduced the slope
or re-centered the midpoint of the band in the past ... A large
policy easing is most likely," said Societe Generale in a note.
Eleven economists polled by Reuters late last week all
expect the Monetary Authority of Singapore (MAS) to loosen
policy at a meeting due no later than Oct. 14. Chinese markets remained closed for a National Day holiday
until Oct. 8, while South Korean financial markets were shut
for a holiday on Thursday.

The following table shows rates for Asian currencies against
the dollar at 0627 GMT.
CURRENCIES VS U.S. DOLLAR

Currency Latest bid Previous day Pct Move
Japan yen 107.100 107.17 +0.07
Sing dlr 1.383 1.3839 +0.08
Taiwan dlr 31.058 31.063 +0.02
Baht 30.560 30.65 +0.29
Peso 51.890 51.98 +0.17
Rupiah 14185.000 14190 +0.04
Rupee 71.110 71.08 -0.04
Ringgit 4.186 4.193 +0.17

Change so far in 2019
Currency Latest bid End 2018 Pct Move
Japan yen 107.100 109.56 +2.30
Sing dlr 1.383 1.3627 -1.45
Taiwan dlr 31.058 30.733 -1.05
Baht 30.560 32.55 +6.51
Peso 51.890 52.47 +1.12
Rupiah 14185.000 14375 +1.34
Rupee 71.110 69.77 -1.88
Ringgit 4.186 4.1300 -1.34

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