* Yuan at 2-month high
* S.Korean cen bank holds rates
* Singapore Q1 GDP -1.3 pct q/q annualised; +2.7 pct y/y
(Adds detail, updates prices)
By Rushil Dutta
May 25 Asian currencies were firm on Thursday
after the minutes of the U.S. Federal Reserve's last meeting
showed policymakers favouring a gradual approach to interest
rate hikes, with the yuan hitting two-month highs on
state-driven dollar selling after Moody's downgraded China's
The yuan rose about 0.2 percent to its strongest
level since end-March after Chinese state-owned banks sold
dollars in the onshore foreign exchange market, five traders
said, in what was seen as a show of strength by
The yuan had seen minor weakness in the previous session
after Moody's Investors Services unexpectedly downgraded China's
long-term local and foreign currency issuer ratings, citing
expectations that China's financial strength would dwindle as
growth slowed and borrowing increased.
Other Asian currencies drew support from the minutes of the
U.S. Fed's May meeting showing policymakers agreeing to hold off
from raising interest rates until it was clear a recent U.S.
economic slowdown was temporary, though most said a hike was
The minutes also showed that policymakers favoured a gradual
reduction in the Fed's massive balance sheet.
The view on short-term interest rates, which the minutes
said was "generally" shared by the nine officials who have a
vote on policy this year, casts some doubt on Wall Street bets
for a hike at the Fed policy meeting over June 13 to June 14.
The dollar went on the back foot as a result, while
U.S. Treasury yields fell fearing slow stimulus removal.
"EM FX in general floated higher in reaction to a weakened
dollar overnight and this should portend a heavier tone for
USD-Asia intra-day," OCBC Bank currency economist Emmanuel Ng
said in a note.
Ng said that net portfolio inflows supported of a range of
Asian currencies, including the won, the Taiwan dollar, the
Indian rupee and Thai baht.
Indonesian financial markets were closed for a public
S. KOREAN WON AND TAIWAN DOLLAR
The won got a major lift after the FOMC minutes
-rising 0.8 percent against the dollar.
South Korean stocks gained for a fifth session,
clocking record highs helped by upbeat comments from the
central bank over local economic growth and further support from
Earlier, the Bank of Korea stood pat on its benchmark rate
for an 11th straight month in its first policy review since
President Moon Jae-in's inauguration.
The Taiwanese currency and stocks benefited from
foreign buying, with the Taiwan dollar ending two days of losses
while the benchmark stock index rose for a fourth
session, adding 0.6 percent.
The Singapore dollar posted small gains after
government data showed Singapore's economy contracted less than
initially estimated in the first quarter on solid growth in
The Ministry of Trade and Industry said it expected the
economy to grow more than 2 percent this year on improving
overseas demand, but warned of risks to the outlook from
tightening financial conditions in China.
Singapore has been among a number of export-reliant
economies in Asia to benefit from a general rise in global
demand from late last year, enjoying strong sales of its tech
CURRENCIES VS U.S. DOLLAR
Change on the day at 0555 GMT
Currency Latest bid Previous day Pct Move
Japan yen 111.620 111.49 -0.12
Sing dlr 1.382 1.3844 +0.16
Taiwan dlr 30.084 30.183 +0.33
Korean won 1117.600 1126.8 +0.82
Baht 34.230 34.37 +0.41
Peso 49.850 49.995 +0.29
Rupee 64.513 64.73 +0.34
Ringgit 4.275 4.291 +0.37
Yuan 6.873 6.8895 +0.24
Change so far
Currency Latest bid End 2016 Pct Move
Japan yen 111.620 117.07 +4.88
Sing dlr 1.382 1.4490 +4.83
Taiwan dlr 30.084 32.279 +7.30
Korean won 1117.600 1207.70 +8.06
Baht 34.230 35.80 +4.59
Peso 49.850 49.72 -0.26
Rupee 64.513 67.92 +5.28
Ringgit 4.275 4.4845 +4.90
Yuan 6.873 6.9467 +1.07
(Reporting by Rushil Dutta in Benagluru; Additional reporting
by Winni Zhou in Shanghai)