* Path ahead is uncertain - Fed Chairman Powell
* Virus may never go away - WHO official
* Chinese yuan hits 1-week low
* Bearish positions on the yuan rise - Reuters poll
(Adds text, updates prices)
By Anushka Trivedi
May 14 (Reuters) - Most Asian currencies eased on Thursday,
after U.S. Federal Reserve Chair Jerome Powell's gloomy economic
assessment led investors to offload risky assets and rush to the
safety of the dollar.
On Wednesday, Powell warned of an "extended period" of weak
economic growth which would be "subject to significant downside
risks" as he talked down the prospect of negative interest rates
in the United States. Investors sought safe-assets after his comments, sparking a
rally in the greenback .DXY , while U.S. Treasury 10-year
yields US10YT=RR dropped. FRX/
"His views have muddied the waters sufficiently that the
buyers have stood aside and sellers have pushed prices lower,"
said Chris Weston, head of research at Melbourne-based brokerage
Pepperstone.
To make matters worse, a top World Health Organization
official said the coronavirus that causes the COVID-19 disease
may never go away and become endemic like HIV. This week, markets were already reeling with the prospect
that a second wave of coronavirus infections would further put
off a global economic recovery after China and South Korea
reported a spike in new cases.
The Indonesian rupiah IDR= and the South Korean won
KRW=KFTC weakened 0.3% each, while the Chinese yuan CNY=CFXS
gave up 0.1% to hit a one-week low.
Meanwhile, Bank Indonesia is set to fund part of the
government's 150 trillion rupiah ($10.1 billion) economic
recovery programme via more bond buying, officials said on
Wednesday. The Philippine peso PHP=PH , which is among the better
performing Asian currencies this year, shed 0.2%.
A Reuters poll showed bullish bets on the peso rose for the
first time since early March as restrictions were lifted and
extended into June only in some of its cities. Maybank analysts said that the search for yield may also
support some bond market inflows in the near term for the
Philippines.
CHINESE YUAN
Bearish positions on the yuan CNY=CFXS rose from a
fortnight ago, a Reuters poll found, as investors fretted about
a flaring up of trade tensions with the United States.
As China tries to regain footing amid a pandemic-fuelled
slump in demand for its products, it is now grappling to hold
onto the Phase 1 trade deal inked with the United States in
January, as President Donald Trump steps up complaints about
Beijing's handling of the pandemic. "We see risk of further bilateral disputes ahead, especially
as the coronavirus pandemic and low energy prices may make it
more difficult for China to meet the trade deal's $200 billion
purchase agreement," Goldman Sachs analysts wrote.
They added that the tensions would increasingly come into
focus as we head towards U.S. elections in November and that has
potential for an abrupt shift in near-term valuations.
The following table shows rates for Asian currencies against
the dollar at 0513 GMT.
CURRENCIES VS U.S. DOLLAR
Currency Latest bid Previous day Pct Move
Japan yen 106.850 107.02 +0.16
Sing dlr 1.421 1.4198 -0.11
Taiwan dlr 29.895 29.906 +0.04
Korean won 1227.900 1223.8 -0.33
Baht 32.090 32.05 -0.12
Peso 50.388 50.3 -0.17
Rupiah 14900.000 14850 -0.34
Rupee 75.460 75.47 +0.01
Ringgit 4.331 4.328 -0.07
Yuan 7.096 7.0910 -0.07
Change so far in 2020
Currency Latest bid End 2019 Pct Move
Japan yen 106.850 108.61 +1.65
Sing dlr 1.421 1.3444 -5.41
Taiwan dlr 29.895 30.106 +0.71
Korean won 1227.900 1156.40 -5.82
Baht 32.090 29.91 -6.79
Peso 50.388 50.65 +0.52
Rupiah 14900.000 13880 -6.85
Rupee 75.460 71.38 -5.41
Ringgit 4.331 4.0890 -5.59
Yuan 7.096 6.9632 -1.88
($1 = 14,900.0000 rupiah)