May 20, 2020 / 5:33 AM / 13 days ago

EM ASIA FX-Most Asian currencies adrift as vaccine doubts dent risk sentiment

    * Scepticism over COVID-19 vaccine keeps Asian FX subdued
    * Rupiah firms after BI holds rates, C/A deficit narrows 
    * BOT seen cutting rates, decision due at 0700 GMT

 (Adds text, updates prices)
    By Rashmi Ashok
    May 20 (Reuters) - Asian currencies struggled to find
direction on Wednesday after a report raised questions about the
effectiveness of an early-stage COVID-19 trial vaccine, ending
the risk-on momentum that had boosted the region's riskier
assets in the previous session.
    Most stock markets in the region inched down and the few
trading in the black saw only incremental gains, after a subdued
session on Wall Street.
    Overnight, medical news website STAT reported that several
vaccine experts had said the effectiveness of Moderna Inc's
 coronavirus vaccine could not be determined due to
scanty details released in its preliminary trial result.

    Optimism over the potential vaccine did not last long and
market nerves have returned, Robert Carnell, ING's regional head
of research for Asia-Pacific, wrote in a note. 
    "By this morning, doubts appear to be growing, though it is
worth bearing in mind that this U.S. firm is just one of many
developing a vaccine worldwide, and there are some promising
signs elsewhere," Carnell wrote.
    The Indonesian rupiah notched firm gains, rising 
about 0.4% to 14,685 against the dollar, after the central bank
unexpectedly stood pat on interest rates, citing the currency's 
stability as its key priority.
    Following the decision, Goldman Sachs analysts reiterated
their bullish stance on IDR bonds, mainly citing lower chances
of rate cuts in the near term in favour of rupiah stability and
the central bank's capacity and willingness to buy bonds.
    Further adding to momentum, data showed Indonesia's current
account deficit narrowed in January-March from the previous
quarter, as imports fell and the deficit in services shrank.

    Meanwhile, the Thai baht was steady ahead of a
monetary policy decision due around 0700 GMT, where the Bank of
Thailand is widely expected to cut its benchmark interest rate
to a new low.
    The tourism-dependent country has taken a hard hit from the
coronavirus outbreak, with data on Monday showing its economy
contracted at its sharpest pace in eight years in the first
quarter, pushing Southeast Asia's second-largest economy into
recession sooner than expected.
The following table shows rates for Asian currencies against the
dollar at 0434 GMT.
 Currency               Latest bid  Previous day  Pct Move
 Japan yen              107.780     107.68        -0.09
 Sing dlr               1.417       1.4160        -0.08
 Taiwan dlr             29.936      29.950        +0.05
 Korean won             1228.500    1225.3        -0.26
 Baht                   31.870      31.89         +0.06
 Peso                   50.680      50.71         +0.06
 Rupiah                 14690.000   14750         +0.41
 Rupee                  75.605      75.64         +0.04
 Ringgit                4.352       4.346         -0.14
 Yuan                   7.105       7.1000        -0.07
 Change so far in 2020                            
 Currency               Latest bid  End 2019      Pct Move
 Japan yen              107.780     108.61        +0.77
 Sing dlr               1.417       1.3444        -5.13
 Taiwan dlr             29.936      30.106        +0.57
 Korean won             1228.500    1156.40       -5.87
 Baht                   31.870      29.91         -6.15
 Peso                   50.680      50.65         -0.06
 Rupiah                 14690.000   13880         -5.51
 Rupee                  75.605      71.38         -5.59
 Ringgit                4.352       4.0890        -6.04
 Yuan                   7.105       6.9632        -1.99
 (Reporting by Rashmi Ashok in Bengaluru; Editing by Subhranshu
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