May 7, 2020 / 6:37 AM / 2 months ago

EM ASIA FX-South Korean won weakens on grim outlook; Philippine peso firms

    * China April exports unexpectedly rise
    * Philippines economy shrinks in Q1
    * S.Korea likely to post current account deficit in April 

 (Adds text, updates prices)
    By Shreya Mariam Job
    May 7 (Reuters) - The South Korean won weakened on Thursday
after a central bank official said the country is likely to
record a current account deficit for the month of April, while
the Philippine peso firmed despite a shock contraction in
economic growth. 
    The South Korean won lost as much as 0.6%. The
country's current account surplus contracted from $6.37 billion
in February to $6.23 billion in March.
    Investor sentiment was frayed by a central bank official's
comment that it was highly likely that South Korea would swing
to a current account deficit in April after posting a surplus
for 11 consecutive months. 
    The impact from the coronavirus has been reflected in a slew
of grim economic data from around the world, with many analysts
warning conditions could get worse before they get better. 
    The Philippines economy unexpectedly shrank in the first
quarter as the pandemic and tough containment measures brought
domestic consumption and business activity to a grinding halt.

    However, the peso which has been one of the most
resilient currencies in the region amid the health crisis,
firmed 0.3%. The currency is one of the only two units in the
region that have firmed so far this year.
    Investors hope that the trend of slowing inflation in the
country leaves more room for the central bank to carry out more
stimulus measures in a bid to boost the economy. 
    "As bad as things were in 1Q, things are likely to get worse
in 2Q," Noelan Arbis, economist at HSBC said in a note. 
    "We expect continued easing from the BSP, with another 25bp
rate cut and 200bp of RRR cuts to come, but timely fiscal
stimulus is much needed," he added.
    Meanwhile, the Chinese yuan firmed marginally
after data showed a surprise rise in the country's exports in
April for the first time this year. 
    Exports rose 3.5% for the month compared to a decline of
15.7% predicted by a Reuters poll. However, a collapse in new
export orders and a double-digit fall in imports signalled more
trouble ahead.
    
    
    CURRENCIES VS U.S. DOLLAR
    
    Change on the day at   0616 GMT                    
  Currency                 Latest bid  Previous     Pct
                                            day    Move
  Japan yen             106.270          106.14   -0.12
  Sing dlr              1.419            1.4206   +0.10
  Taiwan dlr            29.928           29.910   -0.06
  Korean won            1226.100         1222.1   -0.33
  Baht                  32.450           32.385   -0.20
  Peso                  50.540            50.67   +0.26
  Yuan                  7.093            7.1035   +0.15
                                                       
  Change so far in                                     
 2020                                            
  Currency              Latest bid     End 2019     Pct
                                                   Move
  Japan yen             106.270          108.61   +2.20
  Sing dlr              1.419            1.3444   -5.27
  Taiwan dlr            29.928           30.106   +0.59
  Korean won            1226.100        1156.40   -5.68
  Baht                  32.450            29.91   -7.83
  Peso                  50.540            50.65   +0.22
  Rupiah                14980.000         13880   -7.34
  Rupee                 75.755            71.38   -5.78
  Ringgit               4.322            4.0890   -5.39
  Yuan                  7.093            6.9632   -1.83
 
 (Reporting by Shreya Mariam Job in Bengaluru; Editing by Kim
Coghill)
  
 
 
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