EMERGING MARKETS-Asian currencies firm ahead of Fed decision; firmer oil saps appetite

By Tejaswi Marthi

May 4 (Reuters) – Most Asian currencies rose in thin trading on Wednesday, amid caution ahead of the outcome of a U.S. central bank meeting later in the day, where it is expected to raise rates by 50 basis points and provide clues on future hikes.

The dollar .DXY slipped against a basket of currencies in Asia ahead of the Federal Reserve’s decision, which has already been priced in by markets and is aimed at taming sky-high inflation. nL2N2WR1WL USD/

Holidays in Japan, China, Malaysia, Indonesia and Thailand curbed trading activity.

The won KRW=KFTC firmed 0.1%, while the Philippine Peso PHP= rose marginally. Both the Indian rupee INR=IN and the Singapore dollar SGD= were flat.

However, the gains were capped by rising oil prices as the European Union (EU) proposed a phased embargo on Russian oil, along with sanctioning Russia’s top bank and banning Russian broadcasters from European airwaves. nL5N2WW23E

Stock markets in the region were directionless ahead of the Fed’s announcement. However, equities in Philippines .PSI staged a reversal to close 1.2% higher, while stocks in India .NSEI and Singapore .STI fell 1.2% and 0.1%, respectively.

Strength in consumer-focused and utilities stocks drove the benchmark Philippine index .PSI higher, with investors awaiting the country’s inflation data on Thursday.

A Reuters poll shows that inflation in April is expected to come in at 4.6%, within the central bank’s estimate range of 4.2% to 5%.

“The Bangko Sentral ng Pilipinas (BSP) Governor has remained steadfast in his guidance to keep rates unchanged to support the economy recovery but he has recently signalled he would be open to hiking by June to curtail inflation,” said Nicholas Mapa, senior economist for the Philippines at ING.

HIGHLIGHTS:

** Universal Robina Corp URC.PS and SM Prime Holdings SMPH.PS gain 5.7% and 5%, respectively, to be top gainers on .PSI

** India has asked state and private sector utilities to ensure delivery of 19 million tonnes of coal from overseas by end-June as power woes mount nL2N2WV0UR

** Singapore 10-year benchmark yields SG10YT=RR rise 10.4 basis points to 2.623%

(Reporting by Tejaswi Marthi in Bengaluru; editing by Uttaresh.V)

((Tejaswi.marthi@thomsonreuters.com))