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China's goal to keep yuan stable will not change: deputy

c.bank

governor

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U.S. nods to Japan, S.Korea concerns over slumping FX

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Short bets on Asian FX mount as firm dollar dents

confidence

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IMF ready to support Sri Lanka's discussions with

bondholders

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EM currencies up 0.2%, stocks add 0.7%

By Bansari Mayur Kamdar

April 18 (Reuters) - Currencies in emerging markets

gained on Thursday as the dollar rally took a breather, while

the South Korean won jumped after the finance chiefs of U.S.,

Japan and South Korea agreed to cooperate on foreign exchange.

The MSCI index for emerging market currencies

was up 0.2% by 0817 GMT.

The dollar index was off 0.1%, after hitting its

highest level in 5-1/2 months earlier this week as strong U.S.

economic data and persistent inflation dashed bets of near-term

rate cuts by the Federal Reserve and tensions in the Middle East

added to the greenback's safe-asset appeal.

"The hawkish Fed expectations support a stronger U.S.

dollar, but the authorities around the world are not happy to

see the U.S. dollar rally," said Ipek Ozkardeskaya, a senior

analyst at Swissquote Bank.

The won firmed for its second straight session

since hitting a 17-month low on Tuesday, after U.S., Japan and

South Korea agreed to "consult closely" on foreign exchange

markets in their first trilateral finance dialogue on Wednesday.

Other currencies in Asia also followed suit, with the

Indonesian rupiah snapping two straight days of heavy

losses against a softening greenback.

India's rupee was subdued, with the South Asian

country set to begin the world's largest general elections on

Friday.

Bearish positions on most Asian currencies firmed, a Reuters

poll showed, intensifying steadily from the start of the year as

repricing of rate cut bets after strong U.S. economic data

pushed the dollar higher.

On Thursday, China's yuan slightly firmed against a softer

dollar, while the central bank vowed to maintain yuan stability.

China has the confidence, the conditions, and ability to

keep its foreign exchange market stable, Zhu Hexin, deputy

governor at China's central bank, told a news conference.

Meanwhile, official data showed foreign holdings in China's

onshore yuan bonds increased for the seventh consecutive month

in March.

South Africa's rand inched up 0.2% against the

weakening dollar after ending the previous session little

changed following inflation data.

South Africa's central bank is now predicted to deliver only

50 basis points of interest rate cuts this year as inflation is

seen taking slightly longer to return to the bank's comfort

zone, a Reuters poll found.

Currencies in central and eastern Europe extended gains

against the euro, with Poland's zloty, Hungary's

forint and Czech crown up 0.1%-0.2%.

The European Union will consider Poland's defense spending,

the highest in NATO in terms of economic output, as the bloc

pushes for member states to clamp down on excessive deficit

levels, the country's Finance Minister Andrzej Domanski said.

The International Monetary Fund (IMF) spokesperson said the

fund stands ready to support Sri Lanka's discussions with

international bondholders and will provide a formal assessment

after the parties reach a tentative agreement-in-principle.

Overall, the IMF, World Bank and current G20 president

Brazil said on Wednesday there had been significant progress on

global debt issues in recent months, citing new agreements on

desired timelines and comparability of treatment.