March 13, 2020 / 7:17 AM / 22 days ago

EM ASIA FX-Most currencies weaken as pandemic panic boosts dollar appeal

    * Chinese yuan's yield appeal is attractive - analysts
    * Indonesia unveils $8 bln stimulus package
    * South Korean won weakens to 4-year low

 (Adds text, updates prices)
    By Anushka Trivedi
    March 13 (Reuters) - Most Asian currencies fell against a
firmer dollar on Friday, with the Indonesian rupiah and the
South Korean won declining the most, as intensifying panic over
the coronavirus outbreak sent investors scurrying into the
world's reserve currency.
    The dollar's appeal was also boosted by the Federal
Reserve's move to inject $1.5 trillion in short-term liquidity
and change the durations of Treasuries it buys to mitigate the
coronavirus-induced economic stress.
    "The overriding theme from the last 24 hours is that markets
are hunting for U.S. dollars, and don't really care what rates
they pay to get them," Jeffrey Halley, market analyst at OANDA,
wrote in a note.
    Reflecting the demand for the greenback, the benchmark U.S.
Treasury yields fell, he said. 
    In Asia, the Indonesian rupiah and the Korean won
 were the top losers as investors trimmed exposure to
risky assets.
    The rupiah, being one of the high-yielding emerging
currencies, sees ample foreign investment, but risk aversion
sparked by the coronavirus pandemic has caused the recent
unwind, said Sim Moh Siong, a FX strategist at Bank of
    Indonesia has been among the most proactive countries to
roll out measures to shield its economy and currency, with the
central bank purchasing bonds for two consecutive days and the
finance minister introducing a second stimulus package worth $8
    The rupiah slid 2% to its lowest since November 2018, while
the won, whose movement is closely linked to its stock market,
hit a four-year trough. 
    The trade-sensitive won benefited when the United States and
China signed an interim trade pact earlier this year before
worries of a global recession weighed on investor sentiment and
led to heavy equity capital outflows, Siong said.
    Indonesian and South Korean stocks also
plunged, triggering circuit breakers.
    The Thai baht, the Taiwan dollar and the
Malaysian ringgit weakened between 0.1% and 0.8%.
    Among gainers were currencies of oil-importing India
 and the Philippines, benefiting from an
overnight drop in crude prices.
    Meanwhile, all Asian currencies were on track to post loss
for the week during which oil prices crashed and global central
banks and governments unveiled measures to contain the impact of
the coronavirus. 
    The Chinese yuan strengthened 0.7% on Friday, and
was on its way to mark its best session in more than a week.
    Maybank analysts said a combination of strong virus
containment measures, hopes for a recovery in the economy and a
recent dive in U.S. rates enhanced the yuan's yield appeal,
giving it a kind of immunity.
    "Investors will be determined to look past the ugly data in
the near term," they said. 
    Chinese stocks have fallen less than their global
counterparts in recent weeks as the spread of the virus has
slowed and many factories have slowly resumed work.
    The following table shows rates for Asian currencies against
the dollar at 0620 GMT.
 Currency                     Latest bid  Previous day  Pct Move
 Japan yen                    105.430     104.63        -0.76
 Sing dlr                     1.408       1.4110        +0.24
 Taiwan dlr                   30.180      30.150        -0.10
 Korean won                   1219.100    1206.5        -1.03
 Baht                         31.850      31.6          -0.78
 Peso                         51.040      51.31         +0.53
 Rupiah                       14810.000   14510         -2.03
 Rupee                        74.083      74.25         +0.23
 Ringgit                      4.280       4.27          -0.23
 Yuan                         6.982       7.0280        +0.67
 Change so far in 2020                                  
 Currency                     Latest bid  End 2019      Pct Move
 Japan yen                    105.430     108.61        +3.02
 Sing dlr                     1.408       1.3444        -4.49
 Taiwan dlr                   30.180      30.106        -0.25
 Korean won                   1219.100    1156.40       -5.14
 Baht                         31.850      29.91         -6.09
 Peso                         51.040      50.65         -0.76
 Rupiah                       14810.000   13880         -6.28
 Rupee                        74.083      71.38         -3.65
 Ringgit                      4.280       4.0890        -4.46
 Yuan                         6.982       6.9632        -0.26
    ($1 = 14,810.0000 rupiah)

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