U.S. Rate Risk Hurts Asia FX; Yuan Resists Bearish Mood

Bareksa.com - Most emerging Asian currencies eased on Friday, posting another week of losses on growing expectations the U.S. Federal Reserve may signal an earlier-than-expected rate increase next week.

China's yuan resisted the regional weakness to report a slight weekly gain on improving sentiment toward the currency.

Regional units pared some of their earlier losses as investors cut bearish bets before the weekend with the Indian rupee and the South Korean won rebounding.

The rupee strengthened for the day on demand from custodian banks. The won ended the daily local session firmer as exporters' demand for settlements caused investors to cover short positions.

The South Korean currency still underperformed other emerging Asian currencies for the week with a 1.1 percent loss against the dollar on increasing expectations of another rate cut.

Investors also grew more cautious over possible intervention by the foreign exchange authorities as Bank of Korea Governor Lee Ju-yeol expressed concerns over the won's strength against
the yen.

The Singapore dollar has fallen 0.7 percent, which would be the largest weekly loss since mid-January, according to Thomson Reuters data, on concerns over an economic slowdown in
the city-state. The rupee has fallen 0.7 percent.

The Philippine peso closed the week 0.6 percent lower as an expected central bank interest rate hike on Thursday prompted investors to unwind positions built up on expectations
of tightening.

Indonesia's rupiah reported a similar loss. The Thai baht eased 0.4 percent, while the Malaysian ringgit dipped 0.3 percent.