Most Asian currencies steady, ringgit gains on Q1 growth pace

The Malaysian ringgit strengthened significantly on Thursday,  helped by data that showed first-quarter economic growth was faster than expected.

Emerging Asian currencies were mixed on the day as United States and China aim to salvage trade talks that could end their protracted trade dispute.

In addition to the ringgit, another gainer on Thursday was the Indonesian rupiah, which firmed slightly ahead of a central bank rate decision. It advanced 0.1% to 14,445.0 per dollar.

The ringgit strengthened 0.4% - its biggest intraday gain in 3-1/2-month - to 4.155 ringgit to the dollar  after Malaysia's central bank said the economy expanded 4.5% in the first quarter.

That pace was higher than the 4.3% forecast in a Reuters poll. Growth was supported by private sector consumption and a recovery in palm oil production.

Government data also showed Malaysia's current account surplus widened to 16.4 billion ringgit ($3.95 billion) in the first quarter from 10.8 billion ringgit in the previous three months.

In Jakarta, Bank Indonesia (BI) is likely to keep its main interest rate unchanged at 6% for a sixth straight policy meeting due to renewed pressure on the rupiah, according to a Reuters poll.

"The recent round of tariff slinging between the U.S. and China has sparked emerging forex weakness again, which should keep BI on hold for now," ING said in a note.

Adding to the unlikelihood of monetary easing at this juncture, government data on Wednesday showed that Southeast Asia's largest economy posted its widest trade deficit in history in April, as exports slumped.

The trade deficit was $2.5 billion, compared to a median forecast of a $500 million gap in a Reuters poll. The Thai baht gained 0.1%, while the Singapore dollar and the Chinese yuan were largely flat.

The yuan was largely steady. Traders said the news that the U.S. has hit telecoms giant Huawei with severe sanctions did not move the currency.

The Indian rupee added 0.2% even as the country's trade deficit widened in April from a year earlier, data released late on Wednesday showed.