May 4, 2020 / 6:03 AM / 23 days ago

EM ASIA FX-Asian units slip on Sino-U.S. tensions; ringgit weakens ahead of c.bank meet

    * Malaysian c.bank meeting on Tuesday
    * Indonesia inflation rate slows more than expected in April
    * S.Korea factory activity posts sharpest fall since 2009 in
April

 (Adds text, updates prices)
    By Shreya Mariam Job
    May 4 (Reuters) - Asian currencies slipped on Monday on
growing tensions between the United States and China over the
origin of the coronavirus, while the Malaysian ringgit weakened
ahead of a central bank meeting and on a grim economic forecast
for 2020.
    Secretary of State Mike Pompeo said on Sunday that there was
"a significant amount of evidence" that the new coronavirus
emerged from a Chinese laboratory.
    Pompeo's comment comes days after U.S. President Donald
Trump threatened to impose new tariffs on Beijing in retaliation
over the coronavirus outbreak.
    With Chinese markets closed for a holiday, the offshore yuan
 traded largely flat, while other Asian currencies slipped
 into the negative territory.
    The Indonesian rupiah weakened 1.5% and was the worst
performer in the region. The country's inflation rate in April
slowed more than expected as virus-driven curbs dampen demand.

    Meanwhile, South Korean won shed 0.7% against the
dollar, weighed lower by weaker factory data and tensions
between North and South Korea further. 
    Worldwide lockdowns sent South Korea's factory activity in
April tumbling at its sharpest pace since the global financial
crisis, with exporters battered by the worst slump in orders in
16 years. 
    Moreover, multiple gunshots fired from North Korea early on
Sunday towards a guard post in South Korea also frayed investor
sentiment.
    
    MALAYSIAN RINGGIT
    Malaysian ringgit weakened as much as 1.2%, pressured
by broader market sentiment and ahead of the country's central
bank meeting on Tuesday.
    Bank Negara Malaysia is expected to make the biggest cut to
its benchmark interest rate since 2009, according to a Reuters
poll, in an effort to cushion the blow from the coronavirus
pandemic.
    Malaysia's finance minister said on Saturday that the
country's economy in 2020 could shrink more than initially
forecast.
    With emerging Asian central banks adopting unconventional
monetary policies to boost their economies, analysts at Mizuho
say these policies will likely result in an "FX spillover" and
expose Asian units to potential vulnerabilities.
    
    CURRENCIES VS U.S. DOLLAR
  Change on the day at                                 
        0542 GMT                                 
  Currency                 Latest bid  Previous     Pct
                                            day    Move
  Japan yen               106.730        106.93   +0.19
  Sing dlr                1.418          1.4151   -0.22
  Taiwan dlr              29.823         29.802   -0.07
  Korean won              1227.100       1218.2   -0.73
  Peso                    50.580          50.57   -0.02
  Rupiah                  15050.000       14825   -1.50
  Rupee                   75.770          75.11   -0.87
  Ringgit                 4.329           4.293   -0.83
                                                       
  Change so far in 2020                                
  Currency                Latest bid   End 2019     Pct
                                                   Move
  Japan yen               106.730        108.61   +1.76
  Sing dlr                1.418          1.3444   -5.20
  Taiwan dlr              29.823         30.106   +0.95
  Korean won              1227.100      1156.40   -5.76
  Baht                    32.330          29.91   -7.49
  Peso                    50.580          50.65   +0.14
  Rupiah                  15050.000       13880   -7.77
  Rupee                   75.770          71.38   -5.79
  Ringgit                 4.329          4.0890   -5.54
  Yuan                    7.063          6.9632   -1.41
 

 (Reporting by Shreya Mariam Job in Bengaluru; Editing by Anil
D'Silva)
  
 
 
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