April 24, 2020 / 7:00 AM / a month ago

EM ASIA FX-Currencies ease on lockdown extensions, coronavirus drug report

    * Chinese yuan set for second weekly loss
    * Malaysia, Philippines extend lockdowns
    * Ringgit will remain Asian underperformer - ING
    * Taiwan dollar on track for third weekly gain

 (Adds text, updates prices)
    By Anushka Trivedi
    April 24 (Reuters) - Asian currencies slipped on Friday as
risk appetite was weakened by lockdown extensions in parts of
the region to curb the spread of the novel coronavirus, and a
report that the latest COVID-19 experimental drug flopped in a
clinical trial.
    Horrid business activity data from the United States and the
euro zone also added to the gloom as it reminded investors of
the economic damage inflicted by the pandemic.

    The safe-haven U.S. dollar firmed against rivals, 
while the benchmark Treasury yields dropped.
    Meanwhile, Malaysia and the Philippines joined Indonesia and
Singapore in widening their existing restriction orders until at
least mid-May as the coronavirus infection rate showed no signs
of abating.  
    Leading losses in the region, the relatively more
risk-sensitive Indonesian rupiah weakened 0.7%.
    The Malaysian ringgit and the Philippine peso
 dropped 0.1% and 0.3% respectively, while local stock
markets also fell. 
    Morgan Stanley analysts painted a grim outlook for Asian
economies going under extended lockdowns as these measures will
exert severe growth pressure in the second quarter. 
    Beyond this, "the continuation of steady-state soft social
distancing until a vaccine is found is likely to cap the pace of
recovery in the second half," they said.
    In another blow to investor sentiment, a report said Gilead
Sciences Inc's experimental antiviral drug flopped, but
the drugmaker said the findings were inconclusive because the
study was terminated early.
    The weakness in Asian currencies "could largely be
attributed to market players' preference to square positions
ahead of the weekend in this climate of uncertainty," Maybank
analysts wrote.     
    The South Korean won and the Thai baht
gave up about 0.5% each, while the Singapore dollar fell
0.2% even after an unexpected surge in the city-state's March
industrial output.
    The Chinese yuan declined 0.3% against the
greenback and was set for a second straight weekly loss. 
    The Taiwan dollar traded little changed but was on
track to post a third straight weekly gain, demonstrating its
recent resilience to the downturn. 

    The ringgit, whacked by the recent plunge in crude prices as
the country is a net oil exporter, has lost about 1.3% over the
past two weeks.
    Late on Thursday, Malaysia said it would extend travel and
other curbs until May 14 but might consider allowing some
sectors to resume operations.
    The extension of partial lockdown adds downside risk to
quarterly GDP contraction estimates, and with March inflation
turning negative, the central bank will likely ease rates by at
least 50 basis point at its meeting on May 5, ING economists
said in a note.    
    "The MYR should remain an Asian underperformer with the
added drag from weak global oil prices," they added.
    The following table shows rates for Asian currencies against
the dollar at 0601 GMT.
  Currency                  Latest bid  Previous day   Pct Move
  Japan yen                107.630            107.58      -0.05
  Sing dlr                 1.427              1.4242      -0.21
  Taiwan dlr               30.062             30.072      +0.03
  Korean won               1236.300           1229.7      -0.53
  Baht                     32.440               32.3      -0.43
  Peso                     50.790              50.64      -0.30
  Rupiah                   15450.000           15350      -0.65
  Rupee                    76.400              76.07      -0.43
  Ringgit                  4.360               4.355      -0.11
  Yuan                     7.086              7.0672      -0.26
  Change so far in 2020                                        
  Currency                 Latest bid   End 2019       Pct Move
  Japan yen                107.630            108.61      +0.91
  Sing dlr                 1.427              1.3444      -5.80
  Taiwan dlr               30.062             30.106      +0.15
  Korean won               1236.300          1156.40      -6.46
  Baht                     32.440              29.91      -7.80
  Peso                     50.790              50.65      -0.28
  Rupiah                   15450.000           13880     -10.16
  Rupee                    76.400              71.38      -6.57
  Ringgit                  4.360              4.0890      -6.22
  Yuan                     7.086              6.9632      -1.73

 (Reporting by Anushka Trivedi in Bengaluru; Editing by
Subhranshu Sahu)
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