November 21, 2018 / 5:23 AM / 6 months ago

EM ASIA FX-Growth worries hurt Asian currencies; S Korean won hit hard

 (Adds text, updates prices)
    By Aby Jose Koilparambil
    Nov 21 (Reuters) - Most Asian currencies weakened on
Wednesday as a sell-off on Wall Street further fanned global
growth worries that have been at the centre of a shakeout in
financial markets in the past two months. 
    With no signs of an easing in Sino-U.S. trade tensions,
investors fretted about the earnings outlook, business
investment and trade.
    U.S. stocks sold off for the second day on Tuesday as energy
shares dropped on lower oil prices, with the tech-stock heavy
Nasdaq closing at its lowest level in more than seven months -
leaving investors in export-led Asia anxious about the
     The Korean won was off 0.7 percent, falling the
most in nearly two weeks, with the stock benchmark KOSPI index
 sliding 1.6 percent and underscoring the vulnerability
of South Korea's tech-exposed economy.
    The Philippine peso slid as much as 0.6 percent while
the Malaysian ringitt and the Thai baht weakened
0.2 percent each.
    The Indonesian rupiah pulled back 0.4 percent to a
near one-week low of 14,460.00.
    However, the rupiah reversed course to log in moderate gains
after one of its central bank deputy governors said it "will
continue to be in the market" and will prioritize a market
mechanism approach to defend the currency.
    Southeast Asia's largest economy surprised investors on
Thursday by raising its benchmark interest rate for the sixth
time this year, as policymakers struggle to reduce pressure on
the rupiah from surging imports and the country's yawning
current-account deficit.
    The Chinese yuan and Singapore dollar did
slightly better than their regional counterparts, down 0.1
percent and 0.2 percent, respectively.
    The Indian currency markets were closed on the day for a
    "The last thing the (Asia) region needs is the U.S. economy
joining the world's other large economies – Eurozone, Japan and
China – in weakness," said analysts at DBS Group Research in a
    "Global growth worries were also evident in the sell-off of
oil prices and all three commodity-led currencies – the Canadian
dollar, the Australian dollar and the New Zealand dollar," 
    The concerns around slowing growth are likely to keep the
regional currencies under pressure in the short term.
    In Thailand, data this week showed third quarter GDP growth
slowed to its weakest level in seven quarters.
    "Increasing downside risk from Sino-U.S. trade war alongside
softened demand for Thai exports point to a synchronized exports
downturn," the Mizuho Bank analysts said.
    Most analysts expect the trade war between the world's
largest two economies to impact some of the major markets in the
    "We expect US-China tensions and the resultant slowdown in
Chinese demand to weigh significantly on Asia Pacific's growth,
especially in Hong Kong, Singapore, Taiwan, South Korea and
Malaysia, where trade ties with China matter greatly," analysts
at Oxford Economics wrote in a note to clients.
    However, the analysts expect negligible impact on India and
the Philippines as they do less trade with China.
    The Taiwanese dollar was down 0.2 percent in a choppy
    Data on Tuesday showed Taiwan's export orders expanded more
than expected in October, despite the U.S.-China trade war and
worries about demand for electronic gadgets as the year-end
holiday season gets under way.
    However, the country's Ministry of Economic Affairs warned
November's orders could contract as much as 0.6 percent from a
year earlier.
    The following table shows rates for Asian currencies against
the dollar at 0513 GMT.
 Currency                     Latest bid  Previous day  Pct Move
 Japan yen                    112.880     112.75        -0.12
 Sing dlr                     1.375       1.3746        -0.03
 Taiwan dlr                   30.908      30.908        +0.00
 Korean won                   1131.000    1125.8        -0.46
 Baht                         32.990      32.95         -0.12
 Peso                         52.480      52.39         -0.17
 Rupiah                       14565.000   14585         +0.14
 Ringgit                      4.195       4.187         -0.19
 Yuan                         6.945       6.9455        +0.01
 Change so far in 2018                                  
 Currency                     Latest bid  End 2017      Pct Move
 Japan yen                    112.880     112.67        -0.19
 Sing dlr                     1.375       1.3373        -2.74
 Taiwan dlr                   30.908      29.848        -3.43
 Korean won                   1131.000    1070.50       -5.35
 Baht                         32.990      32.58         -1.24
 Peso                         52.480      49.93         -4.86
 Rupiah                       14565.000   13565         -6.87
 Rupee                        71.450      63.87         -10.61
 Ringgit                      4.195       4.0440        -3.60
 Yuan                         6.945       6.5069        -6.31

 (Reporting by Aby Jose Koilparambil in Bengaluru
Editing by Shri Navaratnam)
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