February 14, 2020 / 7:24 AM / 11 days ago

EM ASIA FX-Most Asian units weaken on virus anxiety, but set for weekly gains

    * Taiwan dollar and Malaysian ringgit strengthen
    * There is still demand for carry trades - analyst
    * S.Korea pledges emergency steps to minimise economic

 (Adds text, updates prices)
    By Shriya Ramakrishnan
    Feb 14 (Reuters) - Most emerging Asian currencies weakened
against the U.S. dollar on Friday, but were on course for weekly
gains, supported by prospects of stimulus measures by
policymakers to shield their economies from the impact of the
coronavirus outbreak.
    The outbreak in China showed no signs of peaking with health
authorities on Friday reporting more than 5,000 new coronavirus
cases and 121 new deaths.
    Economists are scaling back growth expectations for the
Chinese economy in the current quarter, though they say the
downturn will be short-lived if the outbreak is contained. 

    "We need concrete evidence that economic data is not going
to be worser than what we think it is. The Asian currency
landscape is however not bad, because we have the People's Bank
of China (PBOC) guiding or trying to keep the yuan trading below
7 and there is still demand for carry trades," Stephen Innes,
chief market strategist at AxiCorp said.
    The onshore Chinese yuan weakened against a
slightly stronger dollar.
    The South Korean won pared early losses to trade
a tick lower, finding some support as the country's two economic
policy chiefs pledged to deploy emergency measures to minimise
the economic impact from the coronavirus outbreak.
    South Korea's central bank chief also said on Friday that
the bank must take a cautious approach to any further rate cuts.

    The Singapore dollar and Thai baht eased
slightly during the day, while the Malaysian ringgit
    Currencies of tourist hubs such as Singapore, Thailand and
Malaysia have relatively been more affected by the virus
outbreak as it threatens a slowdown in Chinese trade and
visitors from China.
    Thailand's tourism ministry on Thursday said the number of
foreign tourists in the country slumped nearly 40% between Feb.
1 and 7.
    Meanwhile, central banks of Malaysia and Thailand have cut
their policy rates by 25 basis points this year. 
    While the Philippine peso, Indonesian rupiah,
and Indian rupee weakened between 0.1% and 0.2% during
the session, analysts say the high yields offered by these
currencies have helped them weather the virus storm stronger
than their peers.
    "The high yielders are a little bit more immune to the carry
and to the virus scare because central banks are easing and we
are getting bond inflows," Innes added. 
    The Taiwan dollar strengthened as much as 0.2%
against the greenback, lifted by a large amount of foreign
exchange inflows and provisions taken to assuage the impact on
the island's economy. 
    Taiwan's cabinet on Thursday proposed a special budget of $2
billion as the virus outbreak threatens to hit its economy,
which is a key part of the global electronics supply chain.

    Foreign investors have purchased $273.8 million worth of
Taiwanese stocks in the past two days, according to Refinitiv
 Change on the day at   0624 GMT                  
 Currency               Latest bid  Previous day  Pct Move
 Japan yen              109.760     109.81        +0.05
 Sing dlr               1.390       1.3891        -0.05
 Taiwan dlr             30.007      30.037        +0.10
 Korean won             1183.700    1182.8        -0.08
 Baht                   31.170      31.14         -0.10
 Peso                   50.510      50.46         -0.10
 Rupiah                 13700.000   13675         -0.18
 Rupee                  71.403      71.29         -0.16
 Ringgit                4.139       4.141         +0.05
 Yuan                   6.986       6.9775        -0.13
 Change so far in 2020                            
 Currency               Latest bid  End 2019      Pct Move
 Japan yen              109.760     108.61        -1.05
 Sing dlr               1.390       1.3444        -3.27
 Taiwan dlr             30.007      30.106        +0.33
 Korean won             1183.700    1156.40       -2.31
 Baht                   31.170      29.91         -4.04
 Peso                   50.510      50.65         +0.28
 Rupiah                 13700.000   13880         +1.31
 Rupee                  71.403      71.38         -0.03
 Ringgit                4.139       4.0890        -1.21
 Yuan                   6.986       6.9632        -0.33

 (Reporting by Shriya Ramakrishnan in Bengaluru, Editing by
Sherry Jacob-Phillips)
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