EM ASIA FX-Most Asian currencies cautious; Indonesia's rupiah under pressure

(Adds text, updates prices)

By Chandini Monnappa

Aug 14 (Reuters) - Most Asian currencies had some respite on

Tuesday as Turkey's lira pulled back from Monday's record low

and the U.S. dollar retreated, although Indonesia's rupiah

weakened before the start of a central bank policy meeting.

The lira recovered after Turkey's central bank

pledged to provide liquidity and cut reserve requirements for

banks.

"With Turkey still not out of the woods despite some

measures to address banking liquidity, we remain wary on EM

Asian FX for now as sentiment towards the EM complex will be

hampered," Mizuho analysts said in a note.

The lira lost almost 10 percent on Monday and has shed more

than two-fifths of its value so far in 2018 on concerns over its

diplomatic rift with the United States and the risk of capital

flight.

Tremors from the lira's plunge were also felt in South

Africa and Argentina with the rand and Argentina's peso

tumbling.

Argentina's central bank surprised by raising interest rates

by 5 percentage points on Monday, but that was still not enough

to stop the peso hitting a record low.

A ripple of selling was triggered on Friday when U.S.

President Donald Trump announced higher duties on Turkish steel

and aluminium exports, spiking EM foreign exchange volatility

gauges.

Among safe haven assets, the dollar steadied at 110.85 yen

, having hit a six-week trough around 110.11 on Monday.

The dollar was a shade softer against a basket of

peers at 96.324, and gold prices slipped to their lowest in

almost 20 months.

China's yuan strengthened 0.1 percent as the

market shrugged off underwhelming macro-economic data.

Data out on Tuesday showed China's economy displaying

further signs of cooling, with investment in the first seven

months of the year slowing to a record low and retail sales

softening.

Prior to Tuesday's market opening, the PBOC set the midpoint

rate to 6.8695 per dollar, its weakest level since

May 26, 2017, and 66 pips softer than the previous fix of

6.8629.

The Indian rupee inched lower to 69.970, pulling

back from record lows hit during the previous session. On Monday

the rupee touched an all-time low of 69.62 per

dollar.

"In our view, the rupee was overvalued. We had taken a view

that the rupee would cross 70 versus the USD, and the fall in

other EM currencies has just exacerbated the fall," said

Dhananjay Sinha, head of institutional research at Emkay Global

Financial Services in Mumbai.

South Korea's won and the Singapore dollar

strengthened 0.3 percent and 0.1 percent respectively.

The Thai baht and Philippines peso both

weakened 0.2 percent.

Indonesian rupiah

Indonesia's rupiah weakened 0.3 percent as the

country grapples current account deficits.

The central bank and the government have focused on

relieving pressure on the rupiah, one of Asia's worst-performing

currencies this year.

"The rupiah remains a laggard on concerns that Indonesia's

current account deficit may prove difficult to fund," said Wei

Liang Chang, an FX strategist at Mizuho Bank.

President Joko Widodo is set to hold a cabinet meeting on

Tuesday to discuss foreign exchange strategy a day after the

rupiah weakened more than 1 percent.

"The Cabinet could consider new measures to encourage the

repatriation of FX earnings back into IDR (rupiah), or temper

the current pace of imports to alleviate IDR pressures," said

Mizuho's Wei Liang Chang.

Indonesia's central bank intervened to defend the rupiah on

Monday and will begin its two-day policy meeting on

Tuesday.

Bank Indonesia has raised its main interest rate

by 100 basis points since mid-May to defend the

rupiah but is expected to keep its benchmark interest rate

unchanged on Wednesday, a Reuters poll showed.

The majority of analysts in the poll forecast BI would

hold, but four who initially pencilled-in a hold changed their

views to expect a 25-basis point hike after the rupiah slumped.

The following table shows rates for Asian currencies against

the dollar at 0542 GMT.

CURRENCIES VS U.S. DOLLAR

Japan yen 110.830 110.71 -0.11

Sing dlr 1.375 1.3756 +0.06

Taiwan dlr 30.815 30.812 -0.01

Korean won 1130.300 1133.9 +0.32

Baht 33.320 33.25 -0.21

Peso 53.477 53.37 -0.20

Rupiah 14630.000 14590 -0.27

Rupee 69.970 69.93 -0.05

Ringgit 4.094 4.09 -0.10

Yuan 6.888 6.8900 +0.04

Change so far in 2018

Currency Latest bid End 2017 Pct Move

Japan yen 110.830 112.67 +1.66

Sing dlr 1.375 1.3373 -2.73

Taiwan dlr 30.815 29.848 -3.14

Korean won 1130.300 1070.50 -5.29

Baht 33.320 32.58 -2.22

Peso 53.477 49.93 -6.63

Rupiah 14630.000 13565 -7.28

Rupee 69.970 63.87 -8.72

Ringgit 4.094 4.0440 -1.22

Yuan 6.888 6.5069 -5.53

(Reporting by Chandini Monnappa in Bengaluru; additional

reporting by Aparajita Saxena

Editing by Eric Meijer)