(Adds text, updates prices)
By Patturaja Murugaboopathy
June 4 (Reuters) - Most Asian currencies strengthened on
Tuesday as the dollar struggled in the face of falling Treasury
yields and growing expectations of a near-term interest rate cut
by the Federal Reserve.
The dollar slipped to a five-month low against the yen
earlier, setting the tone for much of the regional currencies.
The benchmark 10-year Treasury yield US10YT=RR fell to its
lowest level since September 2017 overnight, coming within reach
of the 2% threshold after St. Louis Federal Reserve President
James Bullard said a rate cut "may be warranted soon" given the
rising risk to economic growth posed by global trade tensions as
well as weak U.S. inflation.
The strong "likelihood of Fed rate cuts has weighed on the
dollar, while boosting EM Asian currencies," said Qi Gao, Asia
FX Strategist at Scotiabank.
Trade worries have taken a bit of a backseat for regional
currencies this week as investors focused on falling U.S. yields
and searched for better returns outside.
"We expect USD-Asia to have an easing bias for now, with the
weaker dollar likely to prevail," said Emmanuel Ng, an FX
strategist with OCBC Bank in a note.
"However, with the fundamental picture of trade tensions and
economic slowdown still unchanged, we may not want to chase
USD-Asia lower on a multi-session horizon."
The Thai baht THB=TH , which resumed trading after a market
holiday on Monday, rose 1% and led regional gainers on the day.
The Indian rupee INR=IN tacked on 0.1 percent, helped by
strong inflows into the stock and bond markets thanks to
expectations of an interest rate cut by the Reserve Bank of
India (RBI) on Thursday.
India's exchange data showed foreigners bought $142.4
million worth of equities and $275.1 million of bonds on
Monday.
"The RBI is expected to deliver a 25 bp rate cut on Thursday
afternoon, with the aim of stimulating India's economic growth,"
said Scotiabank's Gao.
Gao said a rate cut will boost Indian equities and bonds,
and expectations of more market oriented reforms by Indian Prime
Minister Narendra Modi's second term meant more upside for the
rupee.
The Malaysian ringgit MYR= and Taiwan dollar TWD= also
edged higher on the day.
On the other hand, the South Korean won KRW=KFTC dropped
after data showed the economy grew a revised 1.7 percent during
the first quarter, slower than a 1.8 percent rise estimated
earlier.
China's yuan CNY=CFXS edged lower on Tuesday, but the
Chinese central bank's firm fixing helped curb the fall.
following table shows rates for Asian currencies against
the dollar at 0535 GMT.
CURRENCIES VS U.S. DOLLAR
Change on the day at
0535 GMT
Currency Latest Previous Pct Move
bid day
Japan yen 107.880 108.06 +0.17
Sing dlr 1.368 1.3664 -0.15
Taiwan dlr 31.439 31.503 +0.20
Korean won 1181.90 1182.1 +0.02
0
Baht 31.360 31.67 +0.99
Peso 51.780 51.72 -0.12
Rupee 69.210 69.26 +0.07
Ringgit 4.175 4.18 +0.12
Yuan 6.907 6.9030 -0.06
*Indonesian markets
are closed for
holiday
Change so far in
2019
Currency Latest End 2018 Pct Move
bid
Japan yen 107.880 109.56 +1.56
Sing dlr 1.368 1.3627 -0.42
Taiwan dlr 31.439 30.733 -2.25
Korean won 1181.90 1115.70 -5.60
0
Baht 31.360 32.55 +3.79
Peso 51.780 52.47 +1.33
Rupiah 14270.0 14375 +0.74
00
Rupee 69.210 69.77 +0.81
Ringgit 4.175 4.1300 -1.08
Yuan 6.907 6.8730 -0.49