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Views Article – Sharenet Wealth

Asia, Forex

Most currencies in narrow range ahead of Fed, trade talks

* Thai baht hits one-week high * Sino-U.S. trade talks weigh on sentiment (Adds text, updates prices) By Aby Jose Koilparambil July 30 (Reuters) – Asian currencies traded mostly in a tight range on Tuesday, with markets shifting focus to an expected U.S. Federal Reserve easing this week and possible progress in Sino-U.S. trade talks. The resumption of U.S.-China trade negotiations in Shanghai has given global financial markets some relief but expectations for an agreement during the two-day meeting are low with optimism centred around any “goodwill” gestures. The Fed is expected to cut rates by 25 basis points on Wednesday – its first rate cute in a decade – after a two-day meeting. Markets are looking for clues on whether the move may be a one-off or the first in a series of several cuts. “The investors will continue to tread water awaiting news on the ongoing U.S.-China trade talks as well as the U.S. Fed’s policy decision,” said ING analysts in a note. Prospective monetary easing by the Fed and other major central banks, has kept the gains in Asian currencies in check over the past few weeks. The central banks of South Korea and Indonesia have slashed rates this month to tackle domestic economic troubles and global growth worries amid cooling demand from major trade partner China. Earlier in the day, the Bank of Japan kept monetary policy steady but said it will ramp up stimulus “without hesitation” if the economy loses momentum for hitting its 2% inflation target. The relative strength in the dollar also played its part in keeping Asian currency pairs subdued on the day as the dollar index clung on to near two-month high of 98.165. The Thai baht, resuming trade after Monday’s holiday, appreciated as much as 0.2% to a one-week high. The baht hardly reacted to Thailand’s June factory output data, which fell 5.54% from a year earlier, worse than the 3.15% drop forecast in a Reuters poll, dragged down by lower production of cars, rubber products and petroleum. The South Korean won put on as much as 0.2%, en route to its second consecutive session of gains. The Chinese yuan, the Singapore dollar and the Taiwan dollar eked out marginal gains. Meanwhile, the Indian rupee, the Indonesian rupiah and the Philippine peso weakened slightly. Malaysian markets were closed for a holiday. CURRENCIES VS U.S. DOLLAR Change on the day at 0508 GMT Currency Latest bid Previous day Pct Move Japan yen 108.600 108.77 +0.16 Sing dlr 1.369 1.3701 +0.05 Taiwan dlr 31.082 31.102 +0.06 Korean won 1181.300 1183.5 +0.19 Baht 30.810 30.88 +0.23 Peso 51.020 51 -0.04 Rupiah 14025.000 14015 -0.07 Rupee 68.760 68.73 -0.04 Yuan 6.888 6.8926 +0.07 Change so far in 2019 Currency Latest bid End 2018 Pct Move Japan yen 108.600 109.56 +0.88 Sing dlr 1.369 1.3627 -0.49 Taiwan dlr 31.082 30.733 -1.12 Korean won 1181.300 1115.70 -5.55 Baht 30.810 32.55 +5.65 Peso 51.020 52.47 +2.84 Rupiah 14025.000 14375 +2.50 Rupee 68.760 69.77 +1.47 Ringgit 4.123 4.1300 +0.17 Yuan 6.888 6.8730 -0.22 (Reporting by Aby Jose Koilparambil in Bengaluru Editing by Jacqueline Wong)


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