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EMERGING MARKETS-Philippine peso firms ahead of c.bank meeting, other Asian currencies slip

Aug 18 (Reuters) - The Philippine peso firmed modestly on Thursday ahead of an expected half-point interest rate hike, while the Indonesian rupiah and South Korean won weakened on a broader dollar strength amid a continued fight to contain inflation. Minutes from the U.S. Federal Reserve's recent meeting indicated there was "little evidence" that inflation pressures were easing, suggesting policymakers were committed to raising rates as high as necessary to tame rising costs. The dollar index =USD, which measures the greenback against a basket of six major currencies, was steady at 106.61, about 1% stronger this week on certainty that interest rates would remain higher to squash runaway inflation. A market strategist at IG Group, Yeap Jun Rong, said the Fed minutes acknowledged the risks to economic activity from tightening too much, "which suggests a more measured tightening approach could be taken with some eyes on growth conditions". "Much will still lie on the Fed's data-dependent stance and coming after the recent U.S. consumer price index, upcoming data will be closely watched to substantiate the downside risks in inflation." In Asia, the peso PHP= firmed as much as 0.3% ahead of a central bank meeting later in the day. The Bangko Sentral ng Pilipinas (BSP) is expected to hike rates by 50 basis point, a Reuters poll showed, adding onto the hefty unscheduled 75 basis point rise in July. Markets widely expect the hike against the backdrop of a slowing economic recovery and soaring inflation, with a prolonged weakening in the peso over June and July - more than 5% during that period - also raising chances of a bigger hike. "Even if a 50 bp hike materializes, boost to peso could be somewhat modest, given BSP's prior communication on being open to further hikes," analysts at Maybank said in a note. The peso is among the worst performing currencies in the region, depreciating more than 8% on greenback strength as the Fed continues with its aggressive policy tightening stance. Elsewhere, the Indonesian rupiah IDR= slipped as much as 0.4%, while South Korean won KRW=KFTC declined up to 0.6%, touching its lowest level since July 19. KRW/ The Thai baht THB=TH weakened for a second straight session, while the Indian rupee INR=IN and Singapore dollar SGD= were each down about 0.2%. Most regional stocks were changed marginally. The Indonesian benchmark .JKSE advanced 0.3%, while shares in Singapore .STI added 0.4%. The Philippine benchmark .PSI advanced marginally ahead of the policy meeting. HIGHLIGHTS: ** Indonesian 10-year benchmark yields fall 3.6 basis points to 7.032% ** Thailand to see faster GDP growth in Q3 as investment, tourism returns - finmin ** SGX posts record revenue, profit inches up on derivatives boost Asia stock indexes and currencies at 0347 GMT FX RIC FX DAILY % FX YTD % DAILY % YTD % JPY= .N225 CNY=CFXS .SSEC INR=IN .NSEI Indonesia IDR= .JKSE Malaysia MYR= .KLSE Philippines PHP= .PSI KRW=KFTC .KS11 Singapore SGD= .STI Thailand THB=TH (Reporting by Sameer Manekar in Bengaluru; Editing by Himani Sarkar) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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