March 3, 2020 / 6:29 AM / a month ago

EM ASIA FX-Asian FX gains wither as investors await G7 cues

    * Eyes on G7 conference call later in day
    * Ringgit eases ahead of cenbank meeting
    * Rupiah gains after measures to stem slide 
    * Interactive graphic tracking global spread of coronavirus:
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 (Adds text, updates prices)
    By Nikhil Nainan
    March 3 (Reuters) - Gains in most Asian currencies fizzled
out on Monday, as hopes of a coordinated global approach to
tackle the economic fallout from the coronavirus outbreak gave
way to uncertainties over the details of any such action.
    With markets pinning hopes on a G7 conference call later in
the day, a statement being crafted on how they plan to soften
the economic hit does not specifically call for new government
spending or coordinated rate cuts, a source with knowledge of
the deliberations told Reuters.
    The statement, expected on Tuesday or Wednesday, will see G7
nations pledge to work together to mitigate the damage but the
source did say the language of the statement is subject to
change as it is still under discussion.
    "The devil, it seems, is now in the detail and this will
offer the degree of confidence that the turnaround in risk has
legs," Chris Weston, head of research at brokerage Pepperstone,
said in a note prior to the Reuters story.
    "The market would be looking for strong responses from
central banks and slowing momentum in the spread of new COVID-19
cases. The lack of either could still cause jittery," said
Edward Ng, a portfolio manager at Nikko Asset Management in
    Earlier, the Reserve Bank of Australia became the first
major central bank to cut rates, with some local focus now
shifting to the decision by Malaysia's central bank due later in
the day.
    The dollar had flattened after the G7 story, while 
most currencies in Asia gave up most of their gains. 
    South Korea's won advanced 0.1% against the
dollar, giving up most of its 0.7% gain in early trade, as the
virus continued to spread in the country. Taiwan's dollar
 held its 0.4% gain.
    Money markets are fully pricing in a rate cut of at least
0.25 percentage point by the Federal Reserve at its March 17-18
meeting, though policymakers are dealing with a depleted arsenal
after years of support since the financial crisis.
    Reassurances from leading finance officials in recent days
reflect fears that the epidemic could deal a serious blow to a
global economy trying to recover from the U.S.-China trade war.

    The ringgit weakened 0.1% ahead of the interest rate
decision, with a Reuters poll showing a narrow majority of
economists predicting a 25 basis point cut.
    A series of new measures rolled out by Indonesia on Monday
supported a rise in the rupiah, though the currency fell
off its session peak.
    Bank Indonesia will cut banks' reserve requirements for
savings in foreign currencies, while stepping up its
intervention to steady the unit, which had dropped sharply last
week. It is also relaxing rules for domestic non-deliverable
forward transactions.    
    The rupiah was up 0.1% after strengthening 0.4% earlier.
Yields on 10-year government bonds were little
changed after spiking last week. 
 Change on the day at 0510 GMT                    
 Currency               Latest bid  Previous day  Pct Move
 Japan yen              107.820     108.3         +0.45
 Sing dlr               1.391       1.3898        -0.09
 Taiwan dlr             30.010      30.124        +0.38
 Korean won             1192.900    1193.7        +0.07
 Baht                   31.500      31.47         -0.10
 Peso                   50.730      50.71         -0.04
 Rupiah                 14245.000   14260         +0.11
 Rupee                  72.723      72.68         -0.06
 Ringgit                4.204       4.201         -0.07
 Yuan                   6.971       6.9620        -0.13
 Change so far in 2020                            
 Currency               Latest bid  End 2019      Pct Move
 Japan yen              107.820     108.61        +0.73
 Sing dlr               1.391       1.3444        -3.36
 Taiwan dlr             30.010      30.106        +0.32
 Korean won             1192.900    1156.40       -3.06
 Baht                   31.500      29.91         -5.05
 Peso                   50.730      50.65         -0.16
 Rupiah                 14245.000   13880         -2.56
 Rupee                  72.723      71.38         -1.85
 Ringgit                4.204       4.0890        -2.74
 Yuan                   6.971       6.9632        -0.11
 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by
Subhranshu Sahu)
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