* Malaysia's ringgit set for worst weekly fall in nearly 2
months
* Philippine peso set for first weekly gain in 5 weeks
* Most regional equities decline

By Himanshi Akhand
       Aug 18 (Reuters) - Emerging Asian currencies traded
higher on Friday, tracking gains in China's yuan after the
People's Bank of China set the daily fixing much higher than
expected, while the dollar trimmed some of its gains from
earlier in the week.
    The South Korean won and the Singaporean dollar
 appreciated 0.4% and 0.1%, respectively.
    Malaysia's ringgit gained 0.2%, even as data showed
that the country's economic growth dropped to 2.9% in the second
quarter, hitting the lowest in nearly two years due to weaker
exports and a global slowdown. 
    Bank Negara Malaysia also said the country's full-year
economic expansion will come in at the lower end of the 4% to 5%
range it had forecast earlier, citing global headwinds.
    The ringgit was still on track for its worst week in nearly
two months.
    The Philippine peso, which hit its lowest level since
November on Monday, added 0.5%. The peso is set to post its
first weekly gain in five weeks.   
    The Philippine central bank left its benchmark interest rate
steady at 6.25% for a third straight meeting on Thursday, saying
it needed to balance the need to support economic growth while
keeping inflation in check. 
    Bangko Sentral ng Pilipinas (BSP) Governor said the central
bank has room to resume hiking interest rates without
contracting the economy.
    Analysts at DBS noted that most of the regional central
banks have "preferred to err on the side of caution" and kept
rates on hold into the second half of the year.
    "U.S.-ASEAN-6 rate differentials have narrowed significantly
in this cycle as the regional central banks have not kept up
with pace of U.S. rate adjustments, leaving the currencies (and
debt portfolio flows) vulnerable to volatility in the US dollar/
UST movements," they wrote.
    The dollar index eased on Friday, after touching a two-month
high overnight, but was still headed for a fifth winning week.

    Meanwhile, the People's Bank of China set the midpoint rate,
around which the yuan is allowed to trade in a 2% band, firmer
than the previous fix and more than 1,000 pips stronger than
Reuters' estimate - the largest deviation from market estimates
seen this year.
    The fixing at 7.2006 per U.S. dollar kept the yuan buoyant
and trading in a tight range. It was last up 0.1%.
    For the week, the yuan was down 0.6%, remaining under
pressure due to fears that problems in China's sprawling
property sector could spread to other parts of the country's
economy as growth slows.
        Thailand's baht edged 0.1% higher on Friday,
but was set for a third consecutive weekly fall.
    A Reuters poll found that Thailand's economy likely grew
3.1% in the April-June quarter from a year ago, up from 2.7% in
the previous quarter, driven by increased foreign tourist
arrivals. 
    Meanwhile, Thailand's Pheu Thai Party gained support from a
rival military-backed party, potentially boosting it in its bid
to form a government ahead of a prime ministerial vote in
parliament next week. 
    Bucking the trend, Indonesia'a rupiah fell 0.2% on
Friday and was set for a fifth weekly loss.
    Markets are hoping for further monetary easing in China
after a recent run of weak data highlighted the country's
faltering economic recovery, while strong economic data from the
U.S. this week, particularly retail sales, have bolstered the
case for additional tightening by the Federal Reserve.
    Equities in the region declined, which those in Manila
, Jakarta, Singapore and Seoul down
between 0.5% and 1%.
    
    
HIGHLIGHTS
    ** China Evergrande, the world's most heavily
indebted property developer filed for protection from creditors
in a U.S. bankruptcy court
    ** Malaysia's July exports slump 13.1% on-year, below
forecast
    ** Japan's core inflation eases, bolstering view BOJ will
stand pat
    
  Asia stock indexes and currencies                       
 at 0605 GMT                                        
 COUNTRY   FX RIC          FX     FX  INDE  STOCKS  STOCKS
                      DAILY %  YTD %     X   DAILY   YTD %
                                                 %  
 Japan                  +0.31  -9.82  <.N2  -0.67   20.38
                                      25>           
 China                               EC>           
 India                  +0.09  -0.43  <.NS   -0.47    6.46
                                      EI>           
 Indonesi               -0.16  +1.70  <.JK   -0.47    0.26
 a                                    SE>           
 Malaysia               +0.15  -5.23  <.KL   -0.12   -3.29
                                      SE>           
 Philippi               +0.52  -1.31  <.PS   -0.95   -3.99
 nes                                  I>            
 S.Korea                             11>           
 Singapor               +0.10  -1.26  <.ST   -0.67   -2.34
 e                                    I>            
 Taiwan                 +0.22  -3.75  <.TW   -0.82   15.87
                                      II>           
 Thailand               +0.16  -2.27  <.SE   -0.37   -8.72
                                      TI>           
 

    
 (Reporting by Himanshi Akhand in Bengaluru; Editing by Sonali
Paul)