*
Rupiah rises 0.3%
*
Peso set for worst monthly decline since September
*
S. Korean won weakest Asian currency in April
By Himanshi Akhand April 28 (Reuters) - The Indonesian rupiah was on track for a second straight monthly gain on Friday, while the Philippine and South Korean currencies were set to post monthly declines, as investors remained cautious ahead of the U.S. Federal Reserve's meeting next week. The rupiah firmed 0.3% and was set post a 2.2% gain for the month. The unit is the best-performing Asian currency so far this year due to continued portfolio investment inflows. "High interest rates on offer in the Indonesian government bond market are particularly attractive, especially when people are expecting global bond yields to have peaked," said Alvin Tan, head of Asia foreign exchange strategy at RBC Capital Markets. Tan expects the rupiah to continue strengthening in the near future but said gains would be challenged if risk aversion heightens or the Fed keeps tightening monetary policy beyond the one expected May hike.
In contrast, the South Korean won, Asia's
worst-performing currency so far this year, was set for a nearly
2.7% monthly decline, mainly due a weak growth environment.
A Reuters poll found that South Korea's exports likely fell
in April for a seventh consecutive month in their longest
falling streak in more than three years, highlighting frail
overseas demand.
The Philippine peso firmed 0.5%, but was set for its
worst monthly loss since September.
The country's central bank said annual inflation in April
was expected to come in between 6.3% and 7.1%. Inflation eased
for the second straight month in March, to 7.6%.
Bangko Sentral ng Pilipinas (BSP) governor had earlier
said the central bank could pause its rate-hiking cycle next
month due to easing inflation.
Asian markets have largely been subdued in recent weeks,
with a lack of fresh triggers keeping trading confined to narrow
ranges.
"There is a huge uncertainty about what happens after the
Fed's rate hike, and it is keeping the market very cautious,"
Tan suggested.
Meanwhile, data pointing to still-sticky U.S. inflation has
reinforced expectations for a 25 basis point rate hike at next
week's Fed meeting. Stocks in the region struggled for direction with Manila and Bangkok adding 0.6% and 0.1%, respectively,
and Jakarta and Singapore declining 0.2% each.
China's yuan bounced from a near seven-week low
against the dollar, but was still poised to end the month with
losses.
"CNY disappointed despite its better-than-expected GDP
growth in 1Q23. Deteriorating U.S.-China relations continue to
eclipse the earlier optimism from China's reopening," DBS
analysts said in a note.
HIGHLIGHTS
** Bank of Japan announced it will maintain ultra-low
interest rates, as expected, and made no tweaks to its yield
curve
** China's factory activity likely expanded at a slower pace
in April, a Reuters poll showed
** Singapore's private property prices rose in the first
quarter, slightly higher than the flash estimate
Asia stock indexes and currencies
at 0711 GMT
COUNTRY FX RIC FX FX INDE STOCKS STOCKS
DAILY % YTD % X DAILY YTD %
%
Japan -1.36 -3.45 <.N2 1.40 10.58
25>
China <CNY=CFXS +0.02 -0.27 <.SS 1.13 7.56
> EC>
India +0.05 +1.13 <.NS 0.29 -0.76
EI>
Indonesi +0.27 +6.17 <.JK -0.19 1.19
a SE>
Malaysia -0.02 -1.37 <.KL -0.09 -5.26
SE>
Philippi +0.45 +0.38 <.PS 0.63 0.89
nes I>
S.Korea <KRW=KFTC +0.02 -5.47 <.KS 0.23 11.86
> 11>
Singapor -0.16 +0.24 <.ST -0.21 0.73
e I>
Taiwan -0.10 -0.10 <.TW 1.09 10.20
II>
Thailand +0.00 +1.35 <.SE 0.12 -8.12
TI>
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic: World FX rates Asian stock markets ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Himanshi Akhand in Bengaluru; Editing by Sam
Holmes and Uttaresh Venkateshwaran)
