* Thai baht on track to strengthen 3% in 2nd quarter
* Yuan set to be worst quarterly performer, sheds over 2%
(Adds text, updates prices)
By Ambar Warrick
June 28 (Reuters) - Most emerging Asian currencies inched up
on Friday on hopes the meeting of the presidents of China and
the United States will increase risk appetites, but many traders
remained cautious.
The majority of regional units were set for meagre gains in
the second quarter, which has seen sharp changes in appetites,
hinged on developments in the Sino-U.S. trade war and broad
moves toward monetary policy easing.
There's intense interest in Saturday's meeting between U.S.
President Donald Trump and Chinese President Xi Jinping for
indications on whether the global economic outlook will brighten
or darken.
Vishnu Varathan, senior economist at Mizuho Bank, has hopes
of some upside for Asian currencies after the Osaka summit.
"To be sure, we are neither complacent about, nor
comfortable with, latent downside risks to Asia/EM FX. But
underlying risks to Asia FX are at least temporarily relegated
to the back seat," he said in a note.
He added that Asia FX may also be poised for some relief
from lower U.S. treasury yields "inspired by ultra-dovish Fed
expectations."
The Thai baht THB=TH , slated to be the best quarterly
performer among Asian peers, strengthened slightly on Friday.
Thailand's relative economic stability through the quarter,
as well the Bank of Thailand's reluctance to ease policy, has
buoyed the baht, which has strengthened nearly 6 percent against
the dollar this year.
Investors were awaiting May trade data later in the day from
the Thai central bank, which on Wednesday cut its forecast for
economic growth and predicted there will be no increase in
exports this year. The yuan CNY=CFXS inched up on a marginally firmer
midpoint fix from the People's Bank of China. Its stronger daily
fixings help keep the currency from breaching the
7-to-the-dollar point.
Chinese manufacturing data for June is expected on the
weekend, and will provide further clues on the effects of an
extended trade war on the world's second largest economy.
A Reuters poll expects a contraction due to weaker demand.
The Philippine peso PHP= weakened 0.18% for the day, while
the Indian rupee INR=IN strengthened a little.
QUARTERLY MOVERS AND SHAKERS
The Thai baht was set to gain around 3% for the April-June
quarter while the yuan was set to lose more than 2% and be the
worst quarterly performer.
The Philippine peso was on track to gain about 2.8% for the
quarter, with healthy inflation in the country providing some
support. The country's central bank held its benchmark interest
rate earlier in June. The South Korean won KRW=KFTC and the Taiwan dollar
TWD=TP were set to lose about 2% and 0.7%, respectively, for
the quarter, as ructions in the global technology sector pointed
to further pressure on the tech-oriented economies of the two.
The two currencies are the worst performers in 2019, among
their peers.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0430 GMT
Currency Latest bid Previous day Pct Move
Japan yen 107.660 107.78 +0.11
Sing dlr 1.354 1.3529 -0.04
Taiwan dlr 31.050 31.101 +0.16
Korean won 1156.500 1158.1 +0.14
Baht 30.740 30.78 +0.13
Peso 51.200 51.13 -0.14
Rupiah 14128.000 14135 +0.05
Rupee 68.983 69.06 +0.11
Ringgit 4.141 4.142 +0.04
Yuan 6.874 6.8778 +0.06
Change so far in 2019
Currency Latest bid End 2018 Pct Move
Japan yen 107.660 109.56 +1.76
Sing dlr 1.354 1.3627 +0.68
Taiwan dlr 31.050 30.733 -1.02
Korean won 1156.500 1115.70 -3.53
Baht 30.740 32.55 +5.89
Peso 51.200 52.47 +2.48
Rupiah 14128.000 14375 +1.75
Rupee 68.983 69.77 +1.14
Ringgit 4.141 4.1300 -0.25
Yuan 6.874 6.8730 -0.01
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