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EM ASIA FX-Asian currencies weaken on grim economic outlook

Published 04/16/2020, 02:48 PM
Updated 04/16/2020, 02:50 PM
© Reuters.
USD/SGD
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US10YT=X
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DXY
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* U.S. March retail sales, factory output sink
* Coronavirus to halt Asia's 2020 growth prospects - IMF
* Chinese yuan eases, Q1 GDP expected on Friday
* Global risk sentiments towards EM to remain weak - DBS
analysts

(Adds text, updates prices)
By Anushka Trivedi
April 16 (Reuters) - Asian currencies fell across the board
on Thursday, with the South Korean won taking the biggest hit,
as investors fled to the safety of the dollar after dire
economic data from the United States intensified fears of a
global recession.
U.S. retail sales suffered their steepest drop on record
last month and output at factories declined by the most since
1946 - revealing the damage wrought by coronavirus and
reinforcing fears that the economy contracted in the first
quarter at its sharpest pace in decades. The gloomy data caused investors to dump risky assets and
seek shelter in the greenback .DXY , while the benchmark
Treasury yields US10YT=RR edged lower. FRX/
The Chinese yuan CNY=CFXS eased to its weakest level in
more than a week, as the U.S. data sparked worries over the
extent of economic hit from the coronavirus ahead of mainland's
first-quarter GDP report the next day. CNY/
As long as world's major economies are not yet in a recovery
phase, "global risk sentiments towards emerging markets could
remain weak and thus, foreign portfolio capital is unlikely to
return in a big way," DBS analysts said in a note.
For countries that are highly dependent on external funding,
a sustained period of foreign capital outflows would impair
their debt-servicing capabilities, DBS analysts added.
Indonesia, which has already experienced an exodus of
outflows since the pandemic crisis began, saw its currency
IDR=ID weaken 0.6%.
Mood soured further after the International Monetary Fund
said growth for Asia would likely be nil for the first time in
60 years in 2020, as exports get pounded by slumping demand and
anti-virus measures shut shops. Coming off a holiday, the trade-reliant South Korean won
KRW=KFTC shed 0.8%, while the Indian rupee INR=IN slid 0.4%,
a day after reporting a collapse in March exports.
The Singapore SGD= and Taiwan dollar TWD=TP gave up 0.3%
and 0.2%, respectively.
ING economists said that the property sector in Singapore
is bearing the brunt of the COVID-19 outbreak, and when combined
with an expected plunge in last month's exports, the
city-state's first-quarter GDP contraction will likely be
steeper than expected.
Malaysia, a net oil-exporting nation, saw its currency
MYR=MY decline 0.7% to mark its worst session in two-weeks, in
tandem with a slump in crude prices.
Oil sank overnight on anticipating a dive in global demand
due to the coronavirus outbreak, while the U.S. reported a
record weekly stockpile. O/R

The following table shows rates for Asian currencies against
the dollar at 0556 GMT

CURRENCIES VS U.S. DOLLAR
Currency Latest bid Previous day Pct Move
Japan yen 107.840 107.47 -0.34
Sing dlr 1.428 1.4231 -0.34
Taiwan dlr 30.097 30.031 -0.22
Korean won 1227.000 1217.3 -0.79
Baht 32.700 32.665 -0.11
Peso 50.720 50.68 -0.08
Rupiah 15640.000 15550 -0.58
Rupee 76.758 76.44 -0.41
Ringgit 4.370 4.338 -0.73
Yuan 7.078 7.0686 -0.13

Change so far in 2020
Currency Latest bid End 2019 Pct Move
Japan yen 107.840 108.61 +0.71
Sing dlr 1.428 1.3444 -5.85
Taiwan dlr 30.097 30.106 +0.03
Korean won 1227.000 1156.40 -5.75
Baht 32.700 29.91 -8.53
Peso 50.720 50.65 -0.14
Rupiah 15640.000 13880 -11.25
Rupee 76.758 71.38 -7.01
Ringgit 4.370 4.0890 -6.43
Yuan 7.078 6.9632 -1.62

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