* Most emerging Asian currencies rack up more than 1% weekly
gains
* Won on track for best week in over 2 years
* Fed easing signals weaken dollar
* Oil price jump hurts rupee
(Adds text, updates prices)
By Rushil Dutta and Renju Jose
June 21 (Reuters) - Most Asian currencies were set for
weekly gains against the dollar on Friday, after the U.S.
Federal Reserve joined peers in indicating it will cut interest
rates to support economic growth.
While the dollar index .DXY was 1.05% lower on the week,
most regional currencies were on track to strengthen more than 1
percent as of 0417 GMT.
The U.S. central bank joined the European Central Bank and
the Reserve Bank of Australia this week in signalling the need
for more policy stimulus to support growth. Markets now expect
the Fed to cut rates as early as next month.
This bodes well for high-yielding currencies such as the
Korean won KRW=KFTC which, though marginally lower on the day,
was the biggest advancer this week, adding close to 2% against
the dollar and clocking its best week in over two years.
Its trade-sensitive peer, the Thai baht THB=TH , firmed
0.5% on the day and over 1% on the week, helped to a degree by
recent developments in the U.S.-China trade war. The baht has
outperformed its regional peers gaining more than 5% this year.
China has confirmed that President Xi Jinping and U.S.
President Donald Trump will meet on the sidelines of the Group
of 20 summit in Japan next week, raising hopes of a detente
between the two economic super-powers. Talks to reach a broad
deal broke down last month after U.S. officials accused China of
backing away from previously agreed commitments.
CENBANKS ON HOLD
The Indonesian, Taiwan and Philippine central banks met to
discuss policy on Thursday. While Bank Indonesia held rates as
expected, its Philippine peer surprised by holding too. Markets
had expected a 25 basis point cut.
The Philippine central bank held the rate on its overnight
reverse repurchase facility at 4.5%, choosing to adopt a
wait-and-see stance to assess the impact of its quarter-point
rate cut in May and a phased reduction in banks' reserve
requirement ratio.
Taiwan's central bank also kept policy rate unchanged, but
lowered its 2019 GDP growth outlook amid trade war
worries. Bank Indonesia, on the other hand, held its policy interest
rate but cut the amount of cash that banks must hold as
reserves.
"For BI, the latest move to lower reserve requirement ratio
suggests that the central bank is keen to keep an accommodative
monetary stance by utilising macro-prudential measures," Zhu
Huani from Mizuho's Asia & Ocenia Treasury Department said in a
note.
A senior official at Indonesia's central bank told Reuters
on Friday that the central bank was "allowing" the rupiah to
appreciate against the dollar in line with "quite strong"
capital inflows and added that the exchange rate level was
"still far from fundamentals".
The rupiah IDR=ID surged 0.4%, but advances were reined in
by a jump in crude oil prices on tensions in the Middle East
after Iran shot down a U.S. military drone. However, higher oil prices clobbered the Indian rupee
INR=IN , which weakened 0.4%.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0417 GMT
Currency Latest bid Previous day Pct Move
Japan yen 107.070 107.29 +0.21
Sing dlr 1.356 1.3559 +0.01
Taiwan dlr 31.060 31.175 +0.37
Korean won 1162.500 1162.1 -0.03
Baht 30.810 30.96 +0.49
Peso 51.450 51.43 -0.04
Rupiah 14125.000 14180 +0.39
Rupee 69.690 69.44 -0.36
Ringgit 4.148 4.146 -0.05
Yuan 6.860 6.8523 -0.11
Change so far in 2019
Currency Latest bid End 2018 Pct Move
Japan yen 107.070 109.56 +2.33
Sing dlr 1.356 1.3627 +0.52
Taiwan dlr 31.060 30.733 -1.05
Korean won 1162.500 1115.70 -4.03
Baht 30.810 32.55 +5.65
Peso 51.450 52.47 +1.98
Rupiah 14125.000 14375 +1.77
Rupee 69.690 69.77 +0.11
Ringgit 4.148 4.1300 -0.43
Yuan 6.860 6.8730 +0.19