* Economic recovery hopes, dollar dip boost Asian FX
* Markets taking U.S.-China tensions in stride - analyst
* Singapore set to unveil economic stimulus package
(Adds text, updates prices)
By Shriya Ramakrishnan
May 26 (Reuters) - Most Asian currencies firmed on Tuesday
as a gradual reopening of global economies and hopes for further
stimulus from China boosted sentiment towards riskier assets
even though worries over Sino-U.S. tensions loomed.
Japan's decision to end coronavirus-induced restrictions and
a survey showing German business morale rebounded in May lifted
hopes of an economic recovery and helped offset a war of words
between Beijing and Washington on trade, coronavirus and
China's proposals for stricter security laws in Hong Kong.
MKTS/GLOB The dollar, often sought in times of economic distress due
to its perceived safety, inched lower, reflecting a recovery in
broader risk sentiment. USD/
"Caution on U.S.-China relations deteriorating further could
unsettle sentiment but at the same time, it appears that markets
are taking things in their stride," Maybank analysts wrote in a
note.
The South Korean won KRW=KFTC led gains in the region,
advancing 0.7% to 1,235.7 against the dollar, while the Taiwan
dollar TWD=TP strengthened 0.4%.
Offering a degree of support was the Chinese central bank
governor's comment that the country would strengthen its
economic policy and continue to offer lower interest rates on
loans, reinforcing expectations of further measures to revive an
economy ravaged by the pandemic. The Chinese yuan CNY=CFXS held steady at 7.133 per dollar.
The Philippine peso PHP= and the Indian rupee INR=IN
added 0.3% and 0.4%, respectively, while the Indonesian rupiah
IDR=ID was the sole decliner, weakening 0.3%.
Financial markets in Malaysia were closed for a holiday.
SINGAPORE DOLLAR RISES AHEAD OF STIMULUS PACKAGE
The Singapore dollar SGD= firmed 0.2% as traders waited
for the city-state's finance minister to unveil the latest
multi-billion dollar economic package later in the day.
Singapore downgraded its 2020 gross domestic product (GDP)
forecast for the third time as the bellwether economy braces for
its deepest ever recession. Following the news, the central bank's chief economist said
monetary policy remained unchanged and would next be reviewed in
October, as planned.
"It's a steep drop for the growth forecast, but that range
also encapsulates expectations for greater uncertainties ahead.
If a second wave can be avoided or kept mild, it may be the
bottom end of the range we will see GDP land," said Jingyi Pan,
market strategist at IG Asia.
"USD/SGD looks to be mostly trading lower with the
better-than-expected Q1 GDP reading and optimism around the
fiscal stimulus today."
CURRENCIES VS U.S. DOLLAR
Change on the day at
0433 GMT
Currency Latest bid Previous Pct
day Move
Japan yen 107.830 107.69 -0.13
Sing dlr 1.421 1.4246 +0.24
Taiwan dlr 29.971 30.076 +0.35
Korean won 1235.700 1244.2 +0.69
Baht 31.920 31.96 +0.13
Peso 50.620 50.751 +0.26
Rupiah 14725.000 14680 -0.31
Rupee 75.660 75.95 +0.38
Yuan 7.133 7.1361 +0.04
Change so far in 2020
Currency Latest bid End 2019 Pct
Move
Japan yen 107.830 108.61 +0.72
Sing dlr 1.421 1.3444 -5.40
Taiwan dlr 29.971 30.106 +0.45
Korean won 1235.700 1156.40 -6.42
Baht 31.920 29.91 -6.30
Peso 50.620 50.65 +0.06
Rupiah 14725.000 13880 -5.74
Rupee 75.660 71.38 -5.66
Yuan 7.133 6.9632 -2.39