Most Asian currencies weaken ahead of Fed meeting

* Most trade in a tight range
* All eyes on Fed rate decision
* Rupee hurt by trade worries, bigger deficit
* Yuan stable

(Adds text, updates prices)
By Rushil Dutta and Renju Jose
June 17 (Reuters) - Most Asian currencies weakened on Monday
as the U.S. dollar drew strength from strong retail sales data
that tempered market expectations that the Federal Reserve could
cut interest rates this week.
Despite a mild pull-back, the dollar index hung
around two-week highs after the United States' Commerce
Department on Friday said retail sales in May had increased, and
revised sales for the prior month higher.
The sales numbers suggested consumer spending was picking
up, and helped allay fears the world's biggest economy was
slowing down sharply in the second quarter.
Expectations that the Fed would cut rates at its June 18-19
meeting receded from 28.3% to 21.7% last week, according to CME
Group's FedWatch tool. However, wagers on easing at the July
meeting remained high.
"With U.S. data not showing clear signs of weakness, it is
difficult to justify looser monetary policy on fundamental or
financial conditions arguments," DBS FX strategist Philip Wee
and rates strategist Eugene Low said in a note.
"The only conceivable way would be to highlight downside
risks due to prolonged China-U.S. trade tensions."
Currencies of export-reliant economies were the worst
performers on the day, with the Thai baht and South
Korean won weakening as much as 0.26% and 0.19%
weaker, respectively.
U.S. pressure on Chinese technology majors and global
weakness in memory chips have made the won the region's worst
performing currency this year.
The Singapore dollar firmed slightly after the island-state
reported a smaller-than-expected decline in non-oil domestic
exports (NODX) in May.
The 15.9% fall, however, was the biggest since March 2016
and was partly due to a sharp decline in shipments to
The Chinese yuan was stable in thin trade
morning, as the central bank kept the midpoint fixing nearly
unchanged to curb downward pressure.

The Indian rupee slipped to over two-week lows
after data released post market hours on Friday showed the
country's trade deficit widened in May to $15.36 billion.
Oil imports, the biggest item in the import bill, rose
8.23%. India meets nearly 80 percent of its fuel demand through
imports. On Monday, higher crude oil prices continued pressuring
the rupee.
Meanwhile, worsening trade relations between India and the
U.S. further dented sentiment.
India said last week it would impose higher retaliatory
tariffs on 28 U.S. products after Washington's withdrawal of key
trade privileges for New Delhi.

Change on the day at 0501 GMT
Currency Latest bid Previous day Pct Move
Japan yen 108.590 108.55 -0.04
Sing dlr 1.371 1.3708 +0.01
Taiwan dlr 31.525 31.530 +0.02
Korean won 1185.700 1185.3 -0.03
Baht 31.230 31.16 -0.22
Peso 52.090 52.07 -0.04
Rupiah 14340.000 14320 -0.14
Rupee 69.840 69.80 -0.06
Ringgit 4.172 4.165 -0.17
Yuan 6.924 6.9258 +0.03

Change so far in 2019
Currency Latest bid End 2018 Pct Move
Japan yen 108.590 109.56 +0.89
Sing dlr 1.371 1.3627 -0.58
Taiwan dlr 31.525 30.733 -2.51
Korean won 1185.700 1115.70 -5.90
Baht 31.230 32.55 +4.23
Peso 52.090 52.47 +0.73
Rupiah 14340.000 14375 +0.24
Rupee 69.840 69.77 -0.10
Ringgit 4.172 4.1300 -1.01
Yuan 6.924 6.8730 -0.74

(Reporting by Renju Jose and Rushil Dutta in Bengaluru; Editing
by Kim Coghill)

First Published: 2019-06-17 03:53:05
Updated 2019-06-17 07:28:00

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