(Corrects typo in Mizuho in 12th paragraph)
* Dollar pause gives life to local units
* Investors eye U.S. inflation data for signs of slowing
* Rupee gains on back of easing oil prices
By Nikhil Nainan
Oct 10 (Reuters) - A retreat in U.S. debt yields gave Asian
currencies some respite on Wednesday, but going forward they are
likely to remain under pressure due to the prospect of more rate
hikes from the U.S. Federal Reserve.
Benchmark U.S 10-year Treasury yields came off seven-and-a
-half-year highs overnight, though investors continue to bet
that the Fed will remain on its policy tightening path, despite
President Donald Trump criticising the central bank on Tuesday
for raising rates too fast.
Investors are focussed on U.S. inflation data due to be
released on Thursday. A Reuters poll forecast that data would
show inflation slowed to 2.4 percent.
The Thai baht was Asia's best performer,
strengthening 0.5 percent to 32.860 per dollar, as analysts
reckoned Thai interest rates would soon start increasing again,
having not risen since 2011.
The country's central bank meets on Nov.14, and its board
members were split when it opted to hold the policy rate steady
"The prospects of the beginning of a rate normalization in
Thailand still looks pretty strong to us, given that the output
gap has likely closed," said Wei Liang Chang, FX strategist at
Meanwhile, the Philippine peso was unmoved after
initially weakening following August trade data that showed a
deficit above $3 billion for a fifth month.
The peso has lost nearly 8 percent this year.
Taiwan financial markets were closed for a holiday.
The yuan firmed 0.1 percent against the dollar to
A Reuters poll forecast China's onshore yuan would pare some
of its recent losses against the dollar over the coming year, as
analysts expected risks would fade from both the U.S.-China
trade war and the emerging markets sell-off.
Mizuho's Wei Liang believes the People's Bank of China would
take a balanced approach, not wanting to stoke capital outflows
by letting the currency weaken too much.
Fall out from the trade war prompted the International
Monetary Fund (IMF) to lower its China's 2019 economic growth
forecast to 6.2 percent from 6.4 percent.
A slip in oil prices helped the rupee, Asia's worst
performer this year, firm 0.4 percent to 74.098 against the
dollar, having plumbed record lows a day earlier.
The rupee is expected to stay near record lows over the
coming year despite expectations that the Reserve Bank of India
will raise rates in December and once more in 2019. India is set
to hold a general election by May, though investors will also be
watching how Prime Minister Narendra Modi's Hindu nationalist
party fares in a series of state polls later this year.
"The rupee will remain fairly weak over the next three to
four months," said Wei Liang Chang.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0547 GMT
Currency Latest bid Previous day Pct Move
Japan yen 112.980 112.94 -0.04
Sing dlr 1.380 1.3819 +0.17
Korean won 1132.400 1132.7 +0.03
Baht 32.860 33.03 +0.52
Peso 54.150 54.15 +0.00
Rupiah 15200.000 15225 +0.16
Rupee 74.098 74.39 +0.39
Ringgit 4.150 4.155 +0.12
Yuan 6.916 6.9260 +0.14
Change so far in 2018
Currency Latest bid End 2017 Pct Move
Japan yen 112.980 112.67 -0.27
Sing dlr 1.380 1.3373 -3.07
Taiwan dlr 30.968 29.848 -3.62
Korean won 1132.400 1070.50 -5.47
Baht 32.860 32.58 -0.85
Peso 54.150 49.977 -7.71
Rupiah 15200.000 13565 -10.76
Rupee 74.098 63.87 -13.80
Ringgit 4.150 4.0440 -2.55
Yuan 6.916 6.5069 -5.92
(Reporting by Sumeet Gaikwad and Nikhil Kurian Nainan in
Bengaluru; Editing by Simon Cameron-Moore)