EM ASIA FX-Asian currencies set to post weekly gains on trade hopes, ECB stimulus

By Shriya Ramakrishnan

* Indonesian rupiah set to gain 1% this week * Strong data, lower oil prices support rupee * Thai baht, Philippine peso strengthen (Adds text, updates prices) By Shriya Ramakrishnan Sept 13 (Reuters) - Most emerging Asian currencies strengthened on Friday, as signs of progress in resolving the protracted U.S.-China trade dispute and the European Central Bank's pledge for indefinite stimulus boosted risk sentiment. Washington welcomed China's renewed purchases of U.S. farm goods, ahead of lower-level talks next week. U.S. President Donald Trump did not rule out a possibility of an interim pact, but emphasized that he preferred a comprehensive trade deal with China. The ECB didn't disappoint investors either, as it delivered a bigger-than-expected stimulus, cut rates and restarted a bond purchases programme. All of this was enough to soothe markets after a tumultuous August. Asian currencies were set for weekly gains. The Indian rupee advanced 0.2% against the dollar, benefiting from a slide in oil prices and strong industrial output readings for July. India's retail inflation rate increased to a 10-month high in August but stayed below the central bank's 4% medium-term target, reinforcing expectations for another interest rate cut next month. Focus will now shift to a series of central bank meetings next week, with the U.S. Federal Reserve, Bank of Japan, Bank Indonesia and Taiwan's central bank slated to review their respective policies. The Thai baht and Philippine peso ticked up 0.2% each against the greenback. Bullish positions on the baht - emerging Asia's top performing currency so far this year - retreated to their lowest since early June, a Reuters poll showed, amid rising bets of a rate cut as early as September, after inflation missed expectations in August. Financial markets in China, Taiwan and South Korea were closed for public holidays. BULLS ADVANCE ON INDONESIAN RUPIAH The Indonesian rupiah advanced 0.3% on the dollar, and was set to gain about 1% for the week. A Reuters poll showed that investors have turned bullish on the rupiah for the first time since August. The rupiah has largely regained its footing this year, after falling about 5.6% in 2018, when the central bank hiked rates six times to stabilize the rupiah and slow capital outflows triggered by rising U.S. rates. "Inflation is under control, real interest rates are supportive of the currency and the central bank has done quite well in terms of stabilizing the currency," said Sim Moh Siong, FX strategist at Bank of Singapore. Sim said with an improvement in global risk sentiment, the rupiah could be one of the biggest beneficiaries among Asian currencies thanks to its high yields. Indonesia's central bank will hold its monetary policy meeting next week, with analysts at ANZ predicting Bank Indonesia to stand pat after two back-to back rate cuts. CURRENCIES VS U.S. DOLLAR Change on the day at 0509 GMT Currency Latest bid Previous day Pct Move Japan yen 108.130 108.09 -0.04 Sing dlr 1.373 1.3749 +0.12 Baht 30.400 30.46 +0.20 Peso 51.760 51.85 +0.17 Rupiah 13945.000 13985 +0.29 Rupee 70.965 71.13 +0.23 Ringgit 4.162 4.164 +0.05 Change so far in 2019 Currency Latest bid End 2018 Pct Move Japan yen 108.130 109.56 +1.32 Sing dlr 1.373 1.3627 -0.77 Taiwan dlr 31.055 30.733 -1.04 Korean won 1191.000 1115.70 -6.32 Baht 30.400 32.55 +7.07 Peso 51.760 52.47 +1.37 Rupiah 13945.000 14375 +3.08 Rupee 70.965 69.77 -1.68 Ringgit 4.162 4.1300 -0.77 Yuan 7.079 6.8730 -2.91 (Reporting by Shriya Ramakrishnan in Bengaluru Editing by Shri Navaratnam)