Most Asian units trade cautiously amid Sino-U.S. trade optimism

* Bank Indonesia holds key interest rate
* Indian rupee poised to decline 1 pct this week
* Chinese yuan set for first weekly loss in 5 weeks

(Adds text, updates prices)
By Niyati Shetty
Jan 18 (Reuters) - Most Asian currencies traded within a
tight range on Friday as optimism on possible progress in the
U.S.-China trade war was offset by strength in the dollar.
The greenback firmed after the Wall Street Journal
reported on Thursday that U.S. Treasury Secretary Steven Mnuchin
has considered lifting some or all tariffs imposed on Chinese
imports.
However, a Treasury spokesperson later denied the report.
Regional markets remain sceptical as earlier in the week, United
States Trade Representative Robert Lighthizer had reportedly
said he did not see any structural progress during Sino-U.S
trade talks in Beijing last week.
Leading declines in the region, the Indian rupee
softened as much as 0.3 percent in early trade. The currency was
poised to decline about 1 percent this week as economic data
pointed to signs of slowing growth.
The currency was the worst performer last year and continues
to show signs of weakening as economists expect the central bank
to ease monetary policy.
Indian business leaders on Thursday urged the central bank
to cut its benchmark interest rate and lower banks' cash reserve
ratio to make it easier to borrow.
Elsewhere, the Philippine peso also faltered 0.2
percent and was on track to weaken 0.7 percent this week,
snapping four straight weeks of gains.
The Chinese yuan was steady against the greenback
on Friday but was set for its first losing week in five.
In a move to support the cooling economy, the Chinese
central bank announced significant liquidity injections this
week, seeking to avoid a cash crunch ahead of a long holiday
period.
The Korean won and the Thai baht inched
up, while the Singapore dollar and the Malaysian rinngit
edged lower.

INDONESIAN RUPIAH
The rupiah was slightly lower against the dollar
leaving it set for a 1 percent decline this week, its first week
of losses since the new year.
On Thursday, the Indonesian central bank held its key
interest rate unchanged and the governor indicated that its
cycle of aggressive rate hikes was "near its peak", thanks to
"dovish" signals by the U.S. Federal Reserve.
"However, down the road, if the dot plots change to indicate
that the Fed will pause for 2019, we don’t believe BI would
consider a cut unless there are clear signs that the trade
balance and current account deficit are narrowing and that
growth falls below trend," OCBC Bank said in a note to clients
on Thursday.

The following table shows rates for Asian currencies against
the dollar at 0450 GMT.
CURRENCIES VS U.S. DOLLAR

Currency Latest bid Previous day Pct Move
Japan yen 109.370 109.23 -0.13
Sing dlr 1.356 1.3550 -0.06
Taiwan dlr 30.845 30.852 +0.02
Korean won 1120.900 1122.5 +0.14
Baht 31.700 31.71 +0.03
Peso 52.470 52.385 -0.16
Rupiah 14185.000 14175 -0.07
Rupee 71.108 71.05 -0.09
Ringgit 4.114 4.112 -0.05
Yuan 6.778 6.7790 +0.01

Change so far in 2019
Currency Latest bid End 2018 Pct Move
Japan yen 109.370 109.56 +0.17
Sing dlr 1.356 1.3627 +0.51
Taiwan dlr 30.845 30.733 -0.36
Korean won 1120.900 1115.70 -0.46
Baht 31.700 32.55 +2.68
Peso 52.470 52.47 +0.00
Rupiah 14185.000 14375 +1.34
Rupee 71.108 69.77 -1.88
Ringgit 4.114 4.1300 +0.39
Yuan 6.778 6.8730 +1.40


(Editing by Simon Cameron-Moore)



First Published: 2019-01-18 03:57:56
Updated 2019-01-18 07:08:33


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