EM ASIA FX-Indian rupee dips despite inflation spike, other Asian currencies eyes Fed

(Adds text, updates prices)

By Patturaja Murugaboopathy

Dec 13 (Reuters) - The Indian rupee dipped nearly

quarter of a percent on Wednesday, despite a

sharper-than-expected jump in consumer inflation which breached

the central bank's 4 percent target.

Other Asian currencies were little changed as traders were

wary of taking fresh positions ahead of a U.S. Federal Reserve

rate decision later in the day. With the Fed widely expected to

hike rates, the focus is turning to any clues on its 2018

tightening plans.

The dollar index, which tracks the greenback against

a basket of six major rival currencies, fell as Democrat Doug

Jones beat Republican Roy Moore in a bitter U.S. Senate race in

Alabama. The dollar index was down 0.2 percent at 93.948.

However, for market participants in Asian currencies, the

main focus was on the Fed.

"I think the market is expecting a dovish hike," said

Christopher Wong, an FX strategist with Maybank.

On the other hand, if the Fed sounds hawkish with upwards

revisions to inflation and growth projections as well as a

commitment to keep its guidance of three rate hikes next year,

it would result in higher U.S. Treasury yields, tighter

financial conditions and could strengthen the dollar, Wong

added.

In India, analysts said stronger price pressures could put

pressure on the central bank to raise policy rates in 2018.

While higher rates would prop up most currencies, the rupee

tends to be more influenced by foreign exchange inflows into

stocks and bonds, which could be dampened by a higher currency.

Data late on Tuesday showed annual inflation

accelerating to a 15-month high of 4.88 percent in November,

driven by a surge in food prices.

The Indonesian rupiah hit a near 1-1/2 month low

against the dollar, as higher oil prices and foreign outflows

undermined the currency.

Foreigners have sold about $250 million of Indonesian

equities so far this month, exchange data showed.

Indonesia's central bank, which will unveil a policy

decision shortly after the Federal Reserve's rate decision, will

keep its key rate unchanged on Thursday to maintain financial

stability, a Reuters poll showed.

The Taiwan dollar was also marginally lower against

the dollar on Wednesday, while all other regional currencies

were trading flat, awaiting Federal Reserve meeting later in the

day.

The Fed will announce its decision on rates at 1900 GMT

Wednesday followed by a statement. Chair Janet Yellen will hold

a news conference at 1930 GMT.

After Asian currencies' strong gains this year, most of them

have fallen this month as traders started to take profits.

"We continue to expect profit taking on these AXJ currency

gains in December," Leong Sook Mei, ASEAN head of global markets

research for the Bank of Tokyo-Mitsubishi UFJ in Singapore,

wrote in a note.

The following table shows rates for Asian currencies against

the dollar at 0534 GMT.

CURRENCIES VS U.S. DOLLAR

Change on the day

at 0534 GMT

Currency Latest Previous Pct Move

bid day

Japan yen 113.27 113.53 +0.23

Sing dlr 1.3513 1.3519 +0.04

Taiwan dlr 30.023 30.018 -0.02

Korean won 1091 1092.4 +0.15

Baht 32.560 32.58 +0.06

Peso 50.470 50.51 +0.08

Rupiah 13584 13567 -0.13

Rupee 64.44 64.40 -0.06

Ringgit 4.074 4.077 +0.07

Yuan 6.618 6.6215 +0.05

Change so far in

2017

Currency Latest End 2016 Pct Move

bid

Japan yen 113.27 117.07 +3.35

Sing dlr 1.3513 1.4490 +7.23

Taiwan dlr 30.023 32.279 +7.51

Korean won 1091 1207.70 +10.72

Baht 32.560 35.80 +9.95

Peso 50.470 49.72 -1.49

Rupiah 13584 13470 -0.84

Rupee 64.440 67.92 +5.40

Ringgit 4.074 4.4845 +10.08

Yuan 6.618 6.9467 +4.97

(Reporting By Patturaja Murugaboopathy; Editing by Kim

Coghill)