EM ASIA FX-Asian currencies rally on Fed inflation view; China yuan at 9-month high

 (Adds details, updates prices)
    By Ambar Warrick
    July 27 (Reuters) - Asian currencies rallied on Thursday as
the U.S. Federal Reserve's cautious inflation assessment sent
the dollar to 13-month lows and rekindled interest in emerging
markets, with the Chinese yuan surging to a more than nine-month
    The Fed kept interest rates unchanged as widely expected,
and said it would start unwinding its massive bond portfolio
"relatively soon", but also noted that overall U.S. inflation
had declined.
    The dollar skidded to 13-month lows against a basket
of currencies, while U.S. Treasury yields tumbled.

    "We think the Fed's statement was slightly polarised as 
they did sound a bit more convinced about job market recovery,
though they were unequivocally admitting to the inflation miss,"
said Vishnu Varathan, senior economist at Mizhuo Bank in
    "We do anticipate a further correction in the dollar,
premised mainly on the fact that we expect the ECB to taper more
emphatically towards the end of the year." 
    On Thursday, the Chinese yuan jumped to its
highest since October 2016 against the dollar. 
    "The euro and sterling were also up against the dollar. I
think Asian currencies are taking all these cues," Varathan
    The Korean won surged against the dollar to its
highest in four months. 
    The won was also underpinned by data showing the country's
gross domestic product grew a seasonally adjusted 0.6 percent in
the second quarter, in line with a Reuters estimate.

    The Thai baht rose to its highest in more than two
years against the dollar. 
    Thailand's economy is still expected to grow 3.6 percent
this year although exports are likely to increase more than
earlier forecast, the country's finance ministry said on
    The Chinese yuan rose against the dollar on Thursday, to its
highest in more than nine months. The yuan was also on track for
its best session in nearly two months. 
    China's central bank set the yuan midpoint at
6.7307 per dollar, the strongest level since Oct. 18.

    The Indian rupee rose to a more than two-month high
against the dollar on Thursday, a day after Indian equities
closed at record highs.
    India's broader NSE index rose 0.56 percent on
Wednesday to end above 10,000 points for the first time, while
India's benchmark BSE index also finished 0.48 percent
higher at a record closing.
    The following table shows rates for Asian currencies against
the dollar at 0459 GMT.      
 CURRENCIES VS U.S. DOLLAR                                     
   Change on the day at                                        
          0459 GMT                                     
  Currency                   Latest bid  Previous day  Pct Move
  Japan yen                  111.000           111.15     +0.14
  Sing dlr                   1.354             1.3571     +0.20
  Taiwan dlr                 30.221            30.402     +0.60
  Korean won                 1111.500          1121.8     +0.93
  Baht                       33.300            33.474     +0.52
  Peso                       50.535             50.64     +0.21
  Rupiah                     13313.000          13335     +0.17
  Rupee                      64.138             64.36     +0.34
  Ringgit                    4.274             4.2825     +0.20
  Yuan                       6.728             6.7555     +0.41
  Change so far in 2017                                        
  Currency                   Latest bid  End 2016      Pct Move
  Japan yen                  111.000           117.07     +5.47
  Sing dlr                   1.354             1.4490     +6.98
  Taiwan dlr                 30.221            32.279     +6.81
  Korean won                 1111.500         1207.70     +8.65
  Baht                       33.300             35.80     +7.51
  Peso                       50.535             49.72     -1.61
  Rupiah                     13313.000          13470     +1.18
  Rupee                      64.138             67.92     +5.90
  Ringgit                    4.274             4.4845     +4.93
  Yuan                       6.728             6.9467     +3.26

 (Reporting by Ambar Warrick in Bengaluru; Editing by Lisa
Twaronite and Richard Borsuk)