* U.S. Fed cuts interest rates by 50 bps
* Malaysia Jan exports drop
* S. Korea says will take steps to tackle coronavirus woes
By Anushka Trivedi
March 4 (Reuters) - Most Asian currencies strengthened on
Wednesday as a surprise 50 basis point rate cut by the U.S.
Federal Reserve overnight sent yield-seekers looking east, with
the Indonesian rupiah leading gains.
Indonesia's finance minister affirmed that the rate cut
could trigger capital inflows to the country. Its currency
IDR= strengthened as much as 1% against the dollar to 14,130
rupiah, while stocks .JKSE climbed 2%. The interest rate differential caused by the surprise cut is
aiding gains in regional currencies against the dollar, said
Jingyi Pan, a Singapore-based market strategist with financial
services firm IG.
"The willingness of the Fed to show support here perhaps
also outlines the possibility of further monetary support coming
along," Pan added.
The Fed lowered borrowing costs on Tuesday in a bid to
protect the world's largest economy from the coronavirus impact,
but the emergency move failed to spur confidence as U.S.
equities dropped on worries about a deeper, lasting slowdown.
The dollar touched a five-month low against the safe-haven
Japanese yen JPY= . Yields on the U.S. benchmark 10-year
Treasury US10YT=RR fell below 1% after the cut, reducing the
appeal of the greenback.
Among Asian currencies, the Chinese yuan CNY=CFXS
strengthened 0.6% after People's Bank of China set a firmer
midpoint rate.
The South Korean won KRW=KFTC hit an over two-week high,
firming 0.8%.
The country's top financial authorities agreed to take bold,
pre-emptive measures, if needed, to tackle economic woes
stemming from the coronavirus, an official said. The Taiwan dollar TWD=TP , Philippine peso PHP= and Thai
baht THB=TH advanced between 0.4% and 0.5% each.
The Thai central bank joined a chorus of monetary
authorities promising measures to combat the coronavirus
fallout, following the Fed's emergency cut. The bank said it was
closely watching the situation and would act as appropriate.
Data from Malaysia showed a drop in exports in January after
they saw a surprise rebound in the previous month. The ringgit MYR=MY gained 0.2%.
Adding to further political tumoil in the nation, its new
prime minister delayed the start of parliamentary proceedings by
two months, as the opposition sought to challenge his government
with a confidence vote. RUPEE
Indian services sector grew at its fastest pace in seven
years in February, bolstered by a recovery in foreign demand and
business confidence, a private survey showed. However, the Indian rupee INR=IN fell 0.1% against the
dollar.
"The risk to further near-term rupee weakness is high,
especially given its seasonal weakness in the second-quarter,"
ANZ analysts said in a note.
"The U.S. Federal Reserve's emergency 50bp cut yesterday
will not alter the rupee's trend," they added.
CURRENCIES VS U.S. DOLLAR AS AT 0511 GMT.
Currency Latest bid Previous day Pct
Move
Japan yen 107.390 107.12 -0.25
Sing dlr 1.388 1.3876 -0.01
Taiwan dlr 29.960 30.087 +0.42
Korean won 1185.700 1195.2 +0.80
Baht 31.380 31.53 +0.48
Peso 50.590 50.82 +0.45
Rupiah 1,4150.000 1,4275 +0.88
Rupee 73.345 73.25 -0.13
Ringgit 4.182 4.19 +0.19
Yuan 6.933 6.9761 +0.62
Change so far in 2020
Currency Latest bid End 2019 Pct
Move
Japan yen 107.390 108.61 +1.14
Sing dlr 1.388 1.3444 -3.12
Taiwan dlr 29.960 30.106 +0.49
Korean won 1185.700 1156.40 -2.47
Baht 31.380 29.91 -4.68
Peso 50.590 50.65 +0.12
Rupiah 14150.000 13880 -1.91
Rupee 73.345 71.38 -2.68
Ringgit 4.182 4.0890 -2.22
Yuan 6.933 6.9632 +0.43