* Rupee on course to post 1st weekly gain in three
* Fall in oil prices help rupee, Thai baht
* Malaysian ringgit set to post 9th straight weekly loss
(Adds text, updates prices)
By Aby Jose Koilparambil
May 24 (Reuters) - The Indian rupee strengthened on Friday
and is set for its first weekly gain in three after Prime
Minister Narendra Modi's ruling coalition scored a massive
election win and supported by a decline in the crude oil price.
The weaker oil prices helped currencies of major net
importers of the commodity, such as India and Thailand, although
moves in other parts of the region's emerging foreign exchange
market were limited by concerns about the worsening Sino-U.S.
trade war.
In India, Modi's thumping win puts his Hindu nationalist
party on course to increase its majority on a mandate of
business-friendly policies and reinforces a global trend of
right-wing populists sweeping to victory. The rupee INR=IN gained as much as 0.4% to touch a session
high of 69.74 against the dollar, en route to a weekly gain of
about 0.7%.
The currency ended 0.5% lower on Thursday after scaling a
session peak of 69.38 when initial leads suggested a facile
victory for Modi's coalition, in line with most of the exit
polls.
Morgan Stanley analysts said foreign flows will likely
accelerate after the electoral verdict.
"We expect the Reserve Bank of India to buy forex at every
opportunity to recoup forex reserves with most balance of
payments indicators slipping towards 2013 levels. High political
stability also opens the scope for raising forex reserves via
sovereign forex bonds," said Bank of America Merrill Lynch
analysts in a note.
Oil declined about 5% as trade tensions dampened the demand
outlook, putting the crude benchmarks near their biggest daily
drop in six months and on course for their steepest weekly fall
in 2019.
The Thai baht THB=TH appreciated up to 0.4%, its biggest
intraday gain in over a week, but is set to decline about 0.6%
for the week.
Investors in most other Asian units refrained from making
big bets as the global sentiment remained negative with Beijing
and Washington trading barbs about the ongoing trade dispute.
U.S. President Donald Trump on Thursday called Huawei
Technologies Co Ltd HWT.UL "very dangerous" after effectively
banning American firms from doing business with the Chinese
telecommunications giant on national security grounds.
Also, no high-level talks have been scheduled between the
U.S. and China since the last round of negotiations ended in
Washington two weeks ago.
The Chinese yuan CNY=CFXS , Indonesian rupiah IDR=ID , the
Malaysian ringgit MYR=MY , the Singapore dollar SGD= , the
Taiwan dollar TWD=TP and the Korean won KRW=KFTC traded in a
tight range.
The Taiwan dollar is set to become the worst regional
performer during the week, shedding as much as 0.8%.
Data earlier in the week showed Taiwan's export orders
contracted for a sixth straight month in April as slowing global
tech demand continued to hurt the island's trade-reliant
economy. Taiwan's high-tech factories are major suppliers for global
tech heavyweights and the continued weakness in orders suggests
global electronic demand will remain soft for some time.
Another unit that came under pressure this week is the
ringgit, which is on course for a 0.4% fall for its ninth
straight weekly loss.
Malaysia's consumer price index rose 0.2% in April from a
year earlier, matching the pace in March, government data showed
on Friday. Earlier this month, Malaysia's central bank cut its key
interest rate for the first time since 2016, amid weak inflation
and concerns over slowing economic growth.
The Philippine peso is set to put on about 0.5% for the
week, while the Korean won is slated to snap a run of four
successive weekly losses with a 0.8% gain.
Investors bet most Asian currencies will come under further
pressure, a Reuters poll showed, with trade tensions between
U.S. and China firmly dominating headlines once
again. With diminishing hopes of a long-awaited trade deal between
the countries, the mood across markets have been apprehensive
with investors shifting money to safer bets.
The following table shows rates for Asian currencies against
the dollar at 0540 GMT.
CURRENCIES VS U.S. DOLLAR
Japan yen 109.620 109.59 -0.03
Sing dlr 1.379 1.3792 +0.02
Taiwan dlr 31.537 31.547 +0.03
Korean won 1189.400 1189.2 -0.02
Baht 31.920 31.98 +0.19
Peso 52.290 52.42 +0.25
Rupiah 14450.000 14455 +0.03
Rupee 69.710 70.01 +0.43
Ringgit 4.191 4.191 +0.01
Yuan 6.912 6.9116 +0.00
Change so far in 2019
Currency Latest bid End 2018 Pct Move
Japan yen 109.620 109.56 -0.05
Sing dlr 1.379 1.3627 -1.17
Taiwan dlr 31.537 30.733 -2.55
Korean won 1189.400 1115.70 -6.20
Baht 31.920 32.55 +1.97
Peso 52.290 52.47 +0.34
Rupiah 14450.000 14375 -0.52
Rupee 69.710 69.77 +0.09
Ringgit 4.191 4.1300 -1.44
Yuan 6.912 6.8730 -0.56